Primark bolsters brand investment as it looks to ‘go beyond’ price, product and stores

Primark is investing in its “brand representation” as it aims to build sustainable growth into the future.

Speaking to investors as parent company Associated British Foods (ABF) revealed its interim results, chief executive George Weston said the clothing retailer had been “doing a lot of work” on its brand.

“There’s an opportunity to go beyond great prices, great product, great stores into sort of a brand representation of who we are, bringing coherence and discipline to our communications,” Weston said.

That will involve emphasising Primark’s key traits, such as its sustainability, its “best prices on the high street”, and its quality. A big part of what Weston termed the “brand world” is Primark’s visual identity, and being more consistent with that across its digital and physical properties.

It has created its first ad for the German market, where it believes its brand perception needs particular work, but it is also confident that investing in marketing can make a difference in the UK.

Despite having been here for a long time, there’s growth left for us in the UK.

George Weston, Associated British Foods

“We know from the work that we’ve done there are segments in all our markets, who don’t shop in our stores as often as we’d like them to,” Weston said.

Primark will celebrate 50 years on the UK high street this year and it enjoys over 95% awareness in the market, according to YouGov’s BrandIndex. But its leadership still thinks it has room to grow.

“Despite having been here for a long time, there’s growth left for us in the UK,” Weston asserted.

ABF’s finance director Eoin Tonge made clear that Primark is “going for growth” rather than margin expansion in its strategy, which includes investment in brand as well as digital channels.

For the 24 weeks ended 4 March 2024, the retail business saw revenues globally increase 7.5% year over year. The profit margin also grew three points to 11.3% from 8.3% in the same period in 2023.

‘Incremental’ impact of digital

Paid online advertising will also play an increased role in Primark’s strategy going forward. Weston said this reflects how consumers are shopping, adding that in many ways the business had “last-mover advantage”, meaning it could learn from what rivals have done in this area.

This is also true in the retailer’s click-and-collect strategy, he said. Primark first trialled click-and-collect in 2022, focusing on childrenswear, before rolling it out further last year.

Click-and-collect will now be available across all Primark departments, with the aim of rolling it out to all its store in Great Britain; however, only a “curated” range of products will be available.

The company said it has seen bigger-than-expected baskets from its click-and-collect customers. It had also seen more customers doing additional shops in-store when they come to pick up their order.

“It’s incremental. It satisfies both new and existing customers by offering them extended choice beyond what their local store offers,” Weston claimed. “We think that the combination of digital and click-and-collect creates a mutually beneficial flywheel effect.”

Primark also introduced a digital stock checker on its website. About 20% of visitors to its website are using this tool, giving the business confidence that its digital presence is driving store traffic.

Over the past few years, the business has been doing a lot of work behind the scenes, whether it’s in digital or brand, to set itself up for the investment it is now making, Tonge stated.