Associated British Foods (ABF) announced that its budget fashion retailer, Primark, will begin offering home delivery services across the UK. This marks a significant strategic shift for Primark, which had historically resisted online sales due to concerns about economic viability given its low price points. The move comes as Primark's comparable sales are projected to decline again in the final quarter of the fiscal year, with a forecasted drop of around 3% overall for the quarter and a 2.6% like-for-like sales decrease for the full 2026 financial year.
The decision to embrace home delivery is part of Primark's broader strategy to strengthen its customer proposition and achieve incremental, profitable growth. The company has already made strides in digital capabilities, including a successful Click & Collect service in the UK, which will continue to grow. To facilitate home delivery, Primark has acquired a highly automated fulfillment facility in Sheffield from the Debenhams Group in a $90 million deal.
This initiative is also happening as ABF prepares to spin off Primark from its food business, with plans for it to be listed as a standalone entity on the FTSE 100 by the end of 2027. While UK sales are expected to be broadly flat or slightly up by 0.6% for the year, continental European sales are projected to be down by approximately 4.3% in Q4. Primark's owner, George Weston, stated that the digital maturity and success of Click & Collect, along with market developments, now present an opportunity for profitable growth through the home delivery channel. Shares in ABF were down by around 9% following the announcement.
