After its owner, Associated British Foods (ABF), unveiled intentions to expand its click-and-collect concept across the UK and reported a 7.5 per cent spike in H1 revenue to £ 4.5 billion (US $ 5.56 billion), industry observers are seeing Primark favourably.
ABF announced intentions to expand Click + Collect to all UK customers and said that its retail division, Primark, had great sales for the 24 weeks that ended on 2nd March. The company attributed this to the opening of new stores and the deliberate price hikes made last year to combat inflation.
Following the previously announced sales gain of 7.9 per cent in the 16 weeks leading up to 6th January 2024, sales increased by 7.5 per cent throughout the time. Due to unseasonable weather and overall trade slowness, trading began slowly, but as the cold weather persisted, average selling prices for cold-weather products increased during the time, despite usually strong stock sell-through.
During the time, there was a 2.1 per cent increase in like-for-like sales growth, which was mostly due to higher average selling prices. However, lower volumes and somewhat smaller basket sizes also had a role.
The period’s adjusted operating profit margin increased to 11.3 per cent, a considerable rise over the same period previous year and a reflection of growth across all countries. This gain in margin was primarily caused by a notable improvement in product gross margin, which was fueled by lower freight and material costs as well as the annualization of price increases from the previous year, with the impact of foreign exchange being largely offset.
Primark is now extending the Click + Collect programme to include the entire UK after tests in a few UK towns revealed significant connection store sales and decent basket sizes. By the end of 2025, Primark plans to expand its Click + Collect service to all 184 of its locations in England, Scotland, and Wales.