It’s never too late to change your mind. Primark It has been slow to see the online channel as an ally, but it could have found an optimal strategy to make its business model profitable. The new website was launched in the United Kingdom just two weeks ago and the fashion company has already been able to see how the traffic has doubled, as it has communicated its parent company Associated British Foods (ABF).
This new website still does not allow the purchase of products. For now, Primark has preferred to focus on offering consumers a place to view the product catalog and check its existence at the “nearest” store. ABF says Primark is “transforming your digital capability» and this will increase brand awareness among new customers and attract more people to your stores. This new website will be available in the rest of the countries from autumn.
the analyst Pippa Stephens, GlobalData Apparel Analyst considers that Primark’s new commitment to digitization «will help the retailer attract more shoppers to their stores, as 48.0% of UK consumers said in GlobalData’s February monthly survey that a website displaying products available in store would increase the likelihood that They will buy at Primark. Your next step should be to implement click & collect, as of the 56.6% of Primark shoppers who said they would prefer to buy their products online, 76.6% would still do so if click & collect was the only option«.
Although Primark has begun to experiment with the digital world, it continues to open stores. In its report on the first semester of 2022, it has informed that it already has 402 stores in 14 markets and the last openings were in Italy and Spain, in the first half of the year. The goal for the end of the year is to reach 530 stores and, for this, countries such as the United States, France, Italy and Iberia will focus on growth.
Sales increased 59% in the first half
The sales up 59% to £3.54bn and adjusted operating profit margin 11.7%. This makes the clothing company confident of reaching the levels of 2019, when it had not yet reached COVID-19.
The analysis you do stephens on the financial results of the company is as follows: «Compared to pre-pandemic levels, total sales remained 4.6% lower, with comparable (lfl) sales down 10% despite most stores being open throughout the period, except for short-term closures in Austria and the Netherlands. This was partly due to the rise of the Omicron variant towards the end of last year, which had a negative impact on footfall; however, it also raises the question of whether Primark’s LFL sales will ever return to pre-COVID-19 levels now that a significant proportion of clothing and footwear spending has shifted online. Its adjusted operating profit has also seen a massive increase of £371m year-on-year to reach £414m, though still down 6.1% over two years.«.
Primark’s performance in different countries:
- In the US they have had a 37% increase in sales compared to before the pandemic due to the expansion of their stores in the market
- In the United Kingdom and continental Europe, they have suffered a drop of 8% and 14% compared to 2019, respectively.
The ABF CEO George WestonHe says: “Primark generated a significant increase in sales and profits, with stores now open and operating largely unrestricted. Looking ahead, inflationary pressures are such that we cannot offset them all with cost savings, so Primark will implement selective price increases on some of its Autumn/Winter stock. However, we are committed to securing our price leadership and everyday affordability, especially in this environment of heightened economic uncertainty.”.