Jason Butler of NW Brown: Primark's click-and-collect strategy will be key to ABF fortunes
PUBLISHED: 11:23 06 November 2018 | UPDATED: 11:31 06 November 2018
Jason Butler of NW Brown looks at Primark owner Associated British Foods, and explains why the retailer's new strategy will be crucial for the group.
Associated British Foods (ABF) is a UK-listed food, ingredients and retail group best known for its high-street brand Primark.
It was founded in 1935 by the Wittington family, who remain majority shareholders, to provide bakery ingredients and swiftly grew to become a broad-based food manufacturing organisation. It has other food-based divisions including Grocery, Sugar, Agriculture and Ingredients.
The group’s strategy has since changed and in 1969 it opened its first Primark store in Dublin, and now represents almost half of the group’s revenues.
High-street retailers have suffered recently due to the ongoing shift to online, resulting in a diminishing presence of large bricks-and-mortar fashion and department stores.
This attrition of competitors should present an opportunity for Primark which has successfully increased its market presence by offering consistent value. The company is also rolling out an online click-and-collect offering to drive footfall to shops.
ABF is not entirely constrained by the pressures affecting other pure non-food retailers.
For example, the grocery division, which manufactures and markets a variety of well-known brands, has enjoyed consistent growth over recent years.
Performance has been driven by brands such as Twinings, which holds significant market share in both the UK and US.
The group’s long-term track record and diversified business offer plenty of opportunities to grow both in the UK and internationally.
But with customers favouring online, management need to deliver their click-and-collect strategy to stay on the front foot.
• Jason Butler of NW Brown is a columnist for EDP Business.