Primark accelerates UK home delivery rollout after profit decline

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Primark UK home delivery rollout

Highlights

Primark accelerates UK home delivery plans by two years after acquiring a Sheffield warehouse from Debenhams, targeting mid-2025 site takeover.
Primark's sales rose 4% to 9.8 billion pounds in the year to 12 September, but profit fell 10% to 1 billion pounds amid higher competition and costs.
ABF plans to spin off Primark from its sugar and grocery businesses in December 2027 to help it compete more effectively against omnichannel rivals.

Warehouse acquisition supports earlier launch

As first reported by The Guardian, Associated British Foods said Primark has brought forward its home delivery plans by about two years after securing a robot-assisted warehouse in Sheffield from Debenhams, owned by Boohoo, PrettyLittle Thing and Karen Millen.

Primark is due to take over the site by the middle of next year and is preparing suppliers to provide stock suitable for individual customer orders as well as bulk deliveries to stores. The retailer already offers click and collect in the UK, a service it has been gradually rolling out since 2022, but it is not available in its mainland Europe stores.

George Weston, chief executive of ABF, said Primark had previously believed it could not make money from home delivery of low-cost fashion. He said industry practices have shifted, with delivery and returns charges now able to cover most logistical costs, improving the economics of the model.

Competition and margin pressure shape strategy

Weston said the company's research shows home delivery can attract new customers rather than simply shift purchases away from stores. He said some shoppers use Primark less often because they live too far from a branch or prefer to shop online.

The change comes as Primark faces pressure from online discount specialists such as Shein, supermarket clothing ranges, and rivals including H&M and Zara, which combine online sales with store networks. Weston said Shein is taking only a small amount of share from Primark, while competition is stronger from retailers that operate across both channels.

Primark's sales rose 4% to 9.8 billion pounds in the year to 12 September, helped by new store openings. Sales at established UK stores rose 0.5%, while comparable sales in mainland Europe fell 4.7% and U.S. established store sales declined 2.6% as consumers cut clothing spending amid higher energy and fuel costs.

The retailer said UK performance benefited from improved product ranges, price cuts and increased marketing, measures now being extended across Europe. However, those actions contributed to a 10% fall in profit to 1 billion pounds, while ABF plans to spin off Primark in December 2027 from its sugar and grocery operations, which include Twinings, Blue Dragon and Jordans.

In our earlier article on retailers linking AI adoption to leadership accountability, we covered how Ralph Lauren revamped its incentive plan to tie executive bonuses to AI literacy and enablement, replacing prior sustainability targets. We also noted that only a small share of S&P 500 companies have embedded AI-related metrics into pay frameworks so far, even as retailers accelerate AI use in pricing, inventory, and customer-facing tools.

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