Primark owner ABF hails record Christmas sales

Primark will open 17 new shops as it continues with its expansion plan, the budget fashion retailer’s owner Associated British Foods (ABF) said (PA) (PA Wire)

Primark owner ABF hailed a record Christmas as cash-strapped shoppers flocked to the budget fashion retailer to escape cost-of-living pressures.

Sales at Primark climbed 15% in the 16 weeks to the beginning of January, reaching a record high in the week running up to Christmas day.

Footfall continued to increase on the high street in city centres and in retail parks, ABF said, helping push Primark’s share of the UK’s clothing and footwear market from 6.5% to 7% over the period.

John Bason, ABF CFO, said: “People are smart, they have to be more careful with the money they’ve got.

“We’re very conscious with people’s budgets and affordability [and] we’ve become the clothing retailer of choice.”

Primark’s profit margins took a hit, ABF said, as the business battled to minimise price rises in the face of soaring cost inflation.

But Bason said the firm had no plans for any further price increases before the end of its financial year in September.

The firm is set to open a further 17 new stores in the course of the year, including the first store in Slovakia and the first in Hungary, as part of plans to add a million square feet of new retail space over the course of the year. At least seven new stores are planned for the US, but none for the UK.

Overall group revenue at ABF was up 20% to £6.7 billion, but the firm warned inflation, labour costs and a strong dollar meant profits were squeezed compared to last year.

Input cost inflation was becoming less volatile, ABF said, but was continuing to put profit margins under pressure.