Primark-owner Associated British Foods has no plans to build an online business for the fashion retailer despite it recording a 63% slump in full-year profit due to Covid-19 lockdowns, the group said today.
Over the last decade Primark, which sells only from physical stores, has been the fastest-growing arm of AB Foods, a group that also owns major sugar, grocery, agriculture and ingredients businesses.
But the pandemic has hit Primark hard, with the clothes retailer's adjusted operating profit for the year to September 12 falling to £362m from £969m in 2018-19.
The falls reflected the closure of its stores across Europe in a first wave of lockdowns.
Primark does not sell online because it does not consider that to be economically viable given the selling price of its products.
AB Foods' chief executive George Weston said that thinking had not changed.
He said Primark had traded well since stores reopened, with £2 billion of sales to September 12, adding that new stores were still being well received in new markets.
"I think that Covid has more demonstrated the strength of Primark than the weakness," he told Reuters.
"What we've seen with Primark is when people are able to shop they prefer to shop with us than do so online," he said.
George Weston also noted that over half of Primark's regular customers did not buy anything online during lockdown, preferring to wait for stores to reopen.
"That is I think a very reassuring statistic," he said.
Primark warned this week that a second wave of lockdowns would dent sales by £375m, but it still expects full year 2020-21 sales and profit to be higher than 2019-20.
Primark will also continue to open more stores, including an acceleration of openings in the US.
AB Foods reported a 40% fall in 2019-20 adjusted earnings per share to 81.1 pence with the profit fall at Primark outweighing increases at its other divisions.
The group is not paying a final dividend.
Profit at AB Foods' grocery division, whose brands include Kingsmill bread, Twinings tea, the Ovaltine drink and Jordans cereal, rose 15% to £437m.
Sugar profit increased to £100m from £30m and the company forecast further improvement in the current year.
The group said it had completed all practical preparations for the end of Britain's Brexit transition period with the European Union on December 31.
"Contingency plans are in place should our businesses experience some disruption at that time," it said.
Shares in AB Foods, majority owned by the family of CEO George Weston, are down 35% so far this year.