Q&A: John Bason on brand collaborations, cost of living and Primark’s digital future

How do you think Primark’s customers are feeling and how will you build on their resilience in the face of the cost-of-living crisis?

“When we talk about performing better than expected and resilience, people are actually spending more on clothing this year than last year so the overall spending hasn’t gone down. You see it in the fact of slightly lower volumes, so I think people are being careful because they are working to tight budgets.

“What Primark is seeing is that the market’s overall level of spending is holding up a bit, but not totally, and a lot of people are choosing to come to Primark. And that’s really why our like-for-like numbers in the UK were up 14%.

“Half of that is price, but the other half is because more people are coming through the door. It’s as simple as that.”

Have you got anything new planned in regard to in-store experiences that will mirror the success of the Greggs collaboration last year?

“We were thrilled with the consumer response to the Greggs partnership – that’s exactly what Primark is excellent at and it really hit the mark.

“Fashion is back, people want something different, people want to replace maybe a lot of their semi-formal and formalwear, which probably didn’t move for much of 2020. It’s about the fun experience of Primark that people love; they are great stores. What I’ll say is: expect the unexpected.”

What costs have you seen rising and falling, and what are the reasons for that?

“We’ve seen a big increase in costs for this financial year. Number one is the exchange rate and the decline of sterling against the dollar, which was really uncomfortable at one point but is coming back today. 

“Energy costs aren’t as sky-high are they were. They are still higher than they were before but are maybe a bit more predictable.

“If we are selling something in May, it is in the warehouse now and we paid for it back in October so it reflects the cost of that time.”

How are you seeing footfall patterns change between different destinations?

“We’ve seen an improvement. Retail parks were a major beneficiary during the lockdowns but what is interesting is they have stayed up there.

“But what we are really seeing is that the big city-centre stores are back – and some people were questioning whether they had a future or not. And we are seeing that not just in the UK, but across Europe. Tourists are back and people are travelling again, so all those things I think are really important.”

What interesting things are happening internationally and how do you think the performance of Primark abroad compares with its performance in the UK?

“In the US, we don’t have that many stores at the moment, but we have got ambitions for a much bigger estate, so I’m going to take the US out of the picture. Really, it is about Europe, excluding the UK.

“For the trading in the second half of last year, which was from April through to September of 2022, we saw compared with pre-Covid levels a very subdued and low level of like-for-like sales. What characterised this half of the year is a big improvement on that. It is coming very close to being back to pre-Covid levels.

“There was probably more caution in Europe and we are seeing in a lot of those markets that they have probably had tougher restrictions for Omicron. And in some there were no restrictions. 

“This improvement is not just the UK – it is both the UK and Europe.”

What’s next for the digital future of Primark?

“I’ve got to say, the word ‘online’ I don’t particularly like any more because it is becoming a little dated. 

“The first thing is a digital engagement for the customer, so for Primark we are making major steps forward there. The website enables you now, if you are in the UK and Ireland, to browse what Primark has got wherever you are on your digital device. That is a big step forward for us and is much needed because people are almost desperate for that change with Primark.

“What I think is really interesting in the UK is that more than one in five people that visit the Primark website are going to the store checkout. The store checkout says that your local store has that size, that style and that item in stock. People are digitally engaging with us, choosing what they like and then they are looking to see if they can get that in store. When that is across all of the Primark estates, it is a big step forward.

“You then come to what I will call ecommerce and it is early days for our click-and-collect trial, which we will come back to. The thing we are not doing is delivering to people’s houses and the difficulty of that channel I think has probably become more proliferate over the last year or so.”

With your agriculture hat on, do you have any comment on the current tomato crisis?

“My comment would be that it reinforces the importance for the UK to be investing in, growing and producing food in the UK for consumption again. Let’s keep that as a focus.” 

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