Comment: Primark Rejects Online Selling

A deluge of updates from major firms in the past few weeks have been more than enough to illustrate that traditional firms are finally shaping up in the face of the internet.

The likes of Next and John Lewis that were early to the game are now being followed by Debenhams and other major retailers that have begun to make huge inroads into the market.

With the exception of one, that is. Primark said this week that online wasn't part of its strategy and it would instead focus on bigger stores to get more products in front of shoppers. 

That contrasts with other retailers who are beginning to question their expansion plans and drawing up multichannel strategies. Tesco said it had accounted for a write-down of £800 million to account for land and property that would now not be developed because its expansion plans had shrunk. Others like B&Q have also said they plan to open fewer stores. 

But Primark's decision is not such a difficult one to understand. Other value retailers have struggled to make the numbers stack up. Asda, for example, initially struggled to make sense of selling cheap clothes online. Andy Bond, chief executive until 2010 and who had previously ran its clothing brand George, doubted the logic but relented in 2008 and George at Asda launched its web site.

Primark: doesn't want a web site

Low-priced clothes are often lower margin. What's more, consumers in that market don't tend to buy in bulk so basket sizes are small. Charging is an option - which Asda now does on more or less all its online orders unless customers opt to pick up in store. But that then plays havoc with the low-end, Every Day Low Price proposition.

Other value retailers have suffered in the past year and it is easy to imagine that the online tidal wave being embraced by the middle market is a struggle for them to manage.

As for Primark, under pressure this week for a different reason following the collapse of a factory run by one of its suppliers, it is sticking to its guns. 

But a thought occurs. It is not long since the majority of high street clothing retailers dismissed the online revolution, some are only just catching up and others never did catch up.

Perhaps Primark feels it will never need to launch an online offer or perhaps it feels it can catch up quickly if it ever does. But these things do not happen overnight and there may come a time when its bullish comments this week rejecting online retail come back to haunt it. 

Tags: Next Directory, John Lewis department store, Debenhams, Asda, George at Asda, Primark, ecommerce, internet shopping, etail, web retailing, online shopping, catalogue retail