Primark’s future looks hopeful with the announcement of click & collect trial, says GlobalData

Following today’s release of Primark’s figures for Q3, FY2021/22 Louise Deglise-Favre, apparel analyst at GlobalData, a leading data and analytics company, offers her view: “Primark’s FY2021/22 Q3 sales were 4% higher than FY2018/19 levels, but much of this growth was supported by store expansion as like-for-like (l-f-l) sales remained 9% below pre-COVID levels, with the retailer still not fully recovered from the pandemic. This lack of recovery, stemming from Primark’s sole reliance on its store estate, has prompted the retailer to announce a major shift in its strategy by finally trialling multichannel retail. Primark announced it will trial a free click & collect service towards the end of the calendar year in 25 of its UK stores across 2000 products in its children’s ranges. Consumers have long demanded Primark fully embrace digital retail, and its click & collect service is highly likely to be successful as 76.6% of UK consumers surveyed by GlobalData in February 2022 stated that they would purchase from Primark online even if it only offered click & collect as a fulfilment option. The trial, and its subsequent expansion depending on the response, will help future-proof the retailer in an increasingly digital world.

“In its home market of the UK, while Primark’s total sales rose 2% in Q3 FY2021/22 against pre-COVID levels, l-f-l sales remained 4% below. However, the retailer benefitted from the return of international travel, as footfall linked to tourism improved in its major city centre stores. Primark also saw a rise in sales of holidaywear and summer outfits as UK consumers prepared for their long-awaited summer holidays. While sales in Continental Europe were up 7% on pre-COVID levels, growth was boosted by store expansions as l-f-l sales remained down 15%. Primark plans to open three stores in Continental Europe by the end of the financial year, across the Italian and Czech markets, along with one each in the US and Ireland, remaining committed to its expansion strategy despite the investment associated with the introduction of click & collect—though the small scale of the trial will limit the initial costs.

“Primark’s licensed products remain one of the retailer’s great assets, with its Stranger Things collection, timed with the release of the show’s fourth season, going viral on social media and almost instantly selling out, with listings of the Stranger Things t-shirt on eBay reaching £150. While Primark’s introduction of multichannel capabilities will undoubtedly help the retailer strengthen its position in the value market, its tardiness to embrace e-commerce will dampen its impact. Primark’s desirable product ranges and attractive price positioning helped it achieve significant success prior to COVID-19, and the introduction of multichannel retailing should restore its competitiveness in the future—especially as its value price points will be especially attractive to consumers due to the shrinking of their discretionary incomes.”