0 months ago
Primark Bets Automated Delivery Can Preserve Its Low-Price Model
Primark is a store known for selling inexpensive clothes.
Until now, it mostly asked shoppers to visit its stores to collect purchases.
Sending individual packages to homes costs money, which could make cheap products less profitable.
Primark has bought an automated building in Sheffield to help prepare and send orders.
The company has already tested online shopping through click and collect.
It also has a mobile app.
Primark says home delivery could create profitable growth in the future.
However, it must keep delivery efficient so prices do not rise.
This is especially important as Primark prepares to become a separate company from its parent’s food businesses.
Primark has acquired an automated fulfilment facility in Sheffield ahead of launching home delivery in Great Britain.
The retailer previously avoided delivery because picking, packing and shipping costs threatened its low-price model.
Primark began website ordering and click-and-collect services in 2022, and launched a mobile app earlier this year.
Automation could help Primark process online orders at scale and reduce labour and handling costs.
The move comes as Associated British Foods prepares to separate Primark from its food operations, with analysts estimating a valuation of up to £9bn.
- Who
- Primark, owned by Associated British Foods, is preparing the service; George Weston discussed the company’s digital progress.
- What
- Primark has acquired an automated fulfilment facility and plans to introduce home delivery in Great Britain.
- Where
- The acquired fulfilment facility is in Sheffield, and the planned service covers Great Britain.
- When
- The launch date has not been announced; Primark says delivery will be introduced “in the future.”
- Why
- Primark wants new growth opportunities, but must use automation and scale to control delivery costs and protect its low-price model.
Growth Through Delivery
Protecting Low Prices
Business expansion
Growth Through Delivery
Home delivery could provide Primark with incremental and profitable growth beyond opening more physical stores.
Protecting Low Prices
Delivery adds picking, packing and transport costs that could make low-priced products harder to sell profitably.
Role of automation
Growth Through Delivery
The Sheffield facility’s automation may allow Primark to process orders at scale while reducing labour and handling costs.
Protecting Low Prices
Automation may not remove the underlying cost challenge of sending small, inexpensive orders individually to customers.
Key facts
- Facility
- Automated fulfilment facility acquired in Sheffield
- Planned market
- Great Britain
- Launch timing
- No date announced; planned for the future
- Existing digital services
- Website ordering, click and collect, and a mobile app
- Click-and-collect launch
- Introduced in 2022, with about 2,000 products available in parts of Britain
- Potential valuation
- Analysts estimate Primark could be valued at up to £9bn
- Corporate change
- Associated British Foods is preparing to separate Primark from its food operations
Quotes
George Weston
Chief executive of Associated British Foods
“Our priority focus areas, the UK and womenswear, continued to outperform our other markets and categories”
easterneye.biz
Sources
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