Primark to launch major new service as post-lockdown sales boosted by Stranger Things
Primark sales are running 4 per cent ahead of pre-pandemic levels as the budget fashion chain continues its expansion including the rollout of a click-and-collect service.
The retailer, which forms part of conglomerate Associated British Foods, is to offer 2,000 children’s products as it trials click-and-collect services in more than two dozen stores in the north west of England, before a potential push into other areas.
The business said the trial will run out of 25 shops and will give those who live nearer a smaller Primark access to a much wider range of items.
AB Foods said: “Our average-size stores are only able to stock a limited range and for these customers the number of options available to them will broadly double, increasing even more for customers of our small stores. This trial will enable us to provide more fashion, licence and lifestyle products to more customers and more often.”
The group said its new UK website, which launched in April, has proved popular. Traffic to the site has risen around 60 per cent, and about 15 per cent of customers are using it to check stock levels in stores.
The retailer is set to deliver the margin that bosses promised a year ago despite inflation rocking large parts of the economy.
In its trading update, AB Foods said that Primark “remains on track to deliver a full-year adjusted operating profit margin of some 10 per cent”. It is an improvement from 7.4 per cent in the company's last financial year - which ended last September.
In November bosses told shareholders to expect a 10 per cent margin for the current financial year, as sales soared when stores reopened following lockdowns.
Sure enough, sales were up by 81 per cent in the three months to the end of May, when compared with last year.
Even when looking further back, to the year before the pandemic, overall Primark sales are still 4 per cent higher than they had been.
Some of the company’s TV partnerships have proven successful, with Lilo & Stitch and Stranger Things branded clothes performing well, the latter being met with an “exceptionally strong customer response”.
It comes despite inflationary pressures, which Primark has previously said will force it to increase prices in the autumn.
The group revealed pressures at many of its food businesses. AB Foods owns AB Sugar, which employs around 40,000 people worldwide, tea company Twinings, and others. Across the food categories, sales rose 10 per cent to £2.3 billion in the quarter.
Richard Hunter, head of markets at investment platform Interactive Investor, said: “Inevitably, the main focus of interest is the performance of Primark, which represents around 44 per cent of overall sales, particularly given the travails which have recently been reported by other retailers in the sector. With the shackles of the pandemic now largely removed, the figures are very promising..
“Against admittedly easy comparatives when the last vestiges of lockdowns remained, sales in the quarter rose by 81 per cent. Perhaps more importantly, sales versus pre-pandemic levels were also ahead by a more pedestrian 4 per cent, but this nonetheless signifies progress.”