SO many retailers have been trumpeting their online success in recent weeks – with the internet now more profitable than the high street for Debenhams, and John Lewis’ annual website sales topping £1bn – that it’s something of a surprise to be presented with old-fashioned bricks and mortar success.
But that’s what Primark delivered yesterday, booking a 55 per cent rise in profits that helped lift parent AB Foods’ earnings before tax up by 25 per cent.
Like an ageing relative that still unplugs the landline to log onto their dial-up internet service and calls it “surfing” the web, Primark has stubbornly refused to join the ranks of the internet elite – and looking at its business model it’s easy to see why. The discount retailer lures customers through its doors with low prices, hands them a basket designed to hold half the store, then sends them off into endless aisles of cut-price clothes until they wind up in a lengthy check-out queue – surrounded by the high-margin impulse purchases that rarely end up in an online shopping trolley.
And so Primark is focusing on what it’s proved good at so far. In the last year alone it’s opened 15 new stores, including a second Oxford Street branch, and it’s now planning a push into France. A million square feet of retail space doesn’t come cheap, but when your margins rise by 2.4 per cent it’s an easy decision to stick to your guns.
With such huge online growth among rivals, it’s inconceivable that chief executive George Weston doesn’t have a revamped version of Primark.com somewhere among his blueprints. But until shoppers stop streaming through its double doors, Primark is best weathering the high street storm than paddling further out to sea.