Primark confirms plans to launch home delivery – but not until the end of 2027

Primark confirmed it will launch home delivery at the end of next year in a bid to reassure potential investors over the spin-off from its owner.

The clothing retailer plans to launch online orders before the end of next year to coincide with the demerger from its owner, Associated British Foods.

The group has moved closer to online retail in recent years, launching a mobile app for British customers earlier this year to support its overdue move into click-and-collect, which debuted in November 2022.

Primark previously argued as recently as May that its low prices and tight margins cannot absorb the additional costs related to online delivery, before announcing plans to introduce the service in Great Britain.

George Weston, the boss of parent Associated British Foods, said: ‘Neither [the demerger and launching deliveries] is dependent on the other, of course.

‘But having home delivery on the horizon, I hope will reassure potential investors in Primark that we’re creating an omnichannel retailer which is super relevant to all the shoppers in its markets.’

Bosses believe the parts of ABF will do better as stand-alone companies than as a combined conglomerate.

But experts have warned that the business needs to show signs of recovering sales at Primark while its loss-making sugar arm also weighs on buzz around a demerger.

Primark’s like-for-like sales fell 2.6 per cent due to a ‘challenging consumer environment across most markets’, the retailer said. 

But Weston said there were ‘so many positive things to point to’ and that Primark was ‘well on its way back ‘, pointing to sales growth in the UK in recent weeks.

He said offering customers affordable prices at Christmas was essential, including £1.30 Christmas T-shirts for children. 

Ranges including family pyjama sets and a ‘festive glamour’ collection by Coleen Rooney are also expected to do well.

The brand is due to split from ABF’s food businesses by December 2027. Should Primark list in London, it would also boost the beleaguered stock market as its size means it is set to sail straight into the FTSE-100.

Analysts are unconvinced splitting Primark will deliver. 

‘The uncomfortable truth is that the real opportunity to spin off Primark at a premium valuation was the best part of two decades ago,’ said Chris Beckett, analyst at Quilter Cheviot. 

‘Primark is still a strong retailer, but today it is a more mature business facing margin pressure, so it is difficult to see the demerger unlocking a significant amount of value on its own.’ 

Mark Crouch, analyst at eToro said: ‘The planned separation of Primark from ABF’s food businesses could give investors a clearer picture of what each is worth. But splitting the group will not solve its underlying problems. 

‘Management must demonstrate that home delivery can deliver profitable growth, while ensuring both businesses emerge from the separation with stronger prospects than they have today.’ 

ABF said profits are set to fall again next year after a ‘challenging’ environment over the past year.

Profits plummeted 14 per cent to £1.46 billion for the year to September 12, compared with the previous year.

Shares in ABF fell 3.3 per cent to 1,878p, bringing the year’s losses to 11 per cent.