Primark CEO: there’s no permanent shift to ecommerce

Paul Marchant, CEO of Irish fast-fashion retailer Primark, doesn’t agree with claims that the coronavirus has made shoppers move permanently to online shopping. He calls people claiming there’s an inevitable and permanent shift to ecommerce “wrong and naïve”.

The CEO of Primark used these words in an article, called “Anyone who thinks that shopping in person is over or outdated would be naïve”, which was published in The Times. He explains: “All we can say confidently about the increase in online shopping during lockdown is that the shops were shut.”

All we can say for sure is that shops were shut.

Surprised at the findings

He also explains that his company commissioned its own research about what was happening with its retail business during the lockdown. ” Even we were surprised at the findings. What we hadn’t realized was how central shops are to how people feel about a place.”

Shops are central to how people feel about a place.

Primark’s research claims shoppers show civic pride and really care about the towns they live in. “When we asked where people’s identity mainly came from, the top answer was their village, town, or city. The state of a town affects how people feel about themselves.”

He goes on about how a declining town affects people’s civic pride, and by extension, self-esteem. “And how do they measure that decline? By the number of shops boarded up. For a large group of people, shops play an important part in their lives. Shopping is a social event, a physical experience.”

‘Support physical stores in their battle to stay open’

He thinks that supporting physical stores should be top of the leveling-up agenda. “For any government that wants to rejuvenate town centers, every time a shop shuts an alarm bell should ring in Whitehall.” One of his suggestions to save physical retail, is by introducing a “zero VAT” period after the vaccine rollout, to kickstart the high street.

Last October, the United Kingdom saw a record retail sales growth during the third quarter. Retail sales volumes increased by 1.5 percent in September and were 4.7 percent higher than a year earlier when there was no coronavirus. The retail sales in the UK beat expectations and were above all forecasts in a Reuters poll of economists.

Brits continue to shop heavily online

Nonetheless, data from the UK Office for National Statistics show clearly that consumers continue to shop heavily online. In January and February of this year, ecommerce sales accounted for about 20 percent of total retail sales, but in May this increased to 32.8 percent. And in October, it was still at 28.1 percent.