Primark is reportedly preparing to enter the home delivery market for the first time in a major shift away from its long-standing store-focused business model.
The budget fashion retailer was recently outbid by Marks & Spencer in the race to acquire Asos’s automated distribution centre in Lichfield, Staffordshire.
The warehouse was sold earlier this month for £67.5million.
Sources told The Times that Primark had targeted the site as part of broader plans to expand its digital operations and strengthen its online offering.
One source said the retailer “knows it needs to go online”.
The move comes as Primark faces growing competition from low-cost online retailers and prepares for an independent flotation on the London Stock Exchange.
The 437,000 square foot warehouse had been extensively upgraded by Asos and was specifically designed to handle online order fulfilment using automated systems.
Andy Cohen, Emily Ratajkowski, Derek Blasberg and Sarah Jessica Parker attend the Primark flagship launch event on May 6
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A source familiar with the deal said the site would be “impossible to use for stores” and added that Primark “wanted this warehouse, as it has automation equipment that lets you do delivery directly to people’s homes”.
Primark has historically resisted launching a full home delivery service, arguing that its low prices and narrow profit margins make online fulfilment difficult to sustain financially.
The retailer has also previously pointed to the cost of online returns as a challenge for profitability.
The failed bid is likely to prove disappointing for Primark chief executive Eoin Tonge, who previously served as chief financial officer at Marks & Spencer before joining the retailer.
Primark prepares major online shift as retailer eyes home delivery expansion
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Despite resisting home delivery for years, Primark has gradually increased its digital presence.
The retailer launched a click-and-collect service in 2022, enabling shoppers to order products online and collect them in stores.
Last month, Primark introduced a mobile app for UK customers to support its click-and-collect operations after previously launching similar services in Ireland and Italy.
The retailer is also facing intensifying competition from online platforms, including Shein, TikTok Shop and Temu, which now attract cost-conscious shoppers.
Alongside its digital ambitions, Primark has continued expanding internationally through new physical store openings.
The company recently opened stores in Dubai and launched a flagship site in Manhattan attended by actress Sarah Jessica Parker.
Associated British Foods, Primark’s parent company controlled by the Weston family, announced plans in April to separate the retailer from its food division.
The conglomerate, which also owns Twinings tea and Kingsmill bread, intends to complete the demerger by 2027.
The split would create two independently listed businesses, consisting of Primark and a separate food operation known as FoodCo.
Analysts estimate Primark could be valued at between £10billion and £13.4billion following the demerger.
Primark has long been regarded as the most valuable part of Associated British Foods and has played a major role in building the Weston family’s fortune.
The latest Sunday Times Rich List estimated the family’s wealth at £17.7billion, making them Britain’s sixth-richest family.
The business was founded in Dublin in 1969 by Arthur Ryan under the Penneys brand before expanding into an international retailer with more than 450 stores worldwide.
A Primark spokesman said: “Our position on home delivery remains unchanged. As part of regular reviews of our distribution network to support future growth, we explored this site as a potential option for our Click & Collect service in Great Britain.”