Lockdowns to wipe £1bn off Primark sales… but Boohoo booms as internet shoppers stock up on casualwear
- Boohoo enjoyed a bumper Christmas but Primark suffered as stores closed
- Primark’s refusal down the years to move online looks like a grave error
- Boohoo generated £661 million in sales in the four months to December 31
Primark’s stubbornness about moving online has left customers high and dry during the pandemic
The gulf between the winners and losers from the coronavirus pandemic was laid bare after two of the UK’s most popular retailers posted very different performances over the festive period.
While online fashion chain Boohoo enjoyed a bumper Christmas, High Street rival Primark suffered as the shutters came down, with 305 of its 389 stores shut due to Covid restrictions, including all 190 in the UK.
Primark has been a staple on the High Street since it came over from Dublin in 1973, but the retailer’s refusal down the years to move online looks like a grave error after it warned that the most recent lockdowns could cost £1 billion in sales.
The Associated British Foodsowned business said Covid restrictions had wiped out an estimated £540 million in revenue in the past 16 weeks. If the shops remain closed until the end of its financial year in February, the loss of sales will be £1.05 billion, up from an earlier estimate of £650m.
Primark’s stubbornness about moving online has left customers high and dry during the pandemic and there has been mounting anger on the company’s Twitter feed. One shopper wrote: ‘How about online shopping like the rest of the world. Why do you still refuse to this? You are losing out.’
Over the summer George Weston, chief executive of Associated British Foods (ABF), said: ‘Our decisions online will be taken in their own context, not because of a once in a hundred years pandemic.’
The argument is that Primark cannot afford to sell its products online as it buys most of its stock six months in advance from factories in Asia at rock bottom prices.
‘The reason we don’t have home deliveries is because we would not make any money at it,’ ABF finance director John Bason told Bloomberg news channel.
Boohoo generated £661 million in sales in the four months to December 31, a rise of 40 per cent on last year
In contrast Boohoo produces most of its clothes in Leicester, which gives it control over quantity and price. While Primark’s doors were closed for the festive period, Boohoo’s online model saw the retailer power ahead of its rival.
The company generated £661 million in sales in the four months to December 31, a rise of 40 per cent on last year. In a further sign of confidence Boohoo plans to open a warehouse in April, creating 1,000 new jobs.
Online rival Asos this week posted a 24 per cent rise in sales to £1.36 billion in the four months to December 31. Analysts said both Asos and Boohoo had successfully pivoted away from party dresses and high heels to pyjamas and socks in order to meet demand for casualwear during lockdown.