Primark will not increase prices any more than already planned before next autumn despite soaring costs for the business, its parent company has said.
AB Foods said that, as customers tighten their belts, it wants to make sure they still see the brand as a cheap alternative to other high street retailers.
As a result the business will not impose any price rises on its ranges until next summer, apart from those it has already implemented and planned.
Chief executive George Weston said: “Primark has faced significant input cost inflation and sharply moving currency exchange rates.
“We have decided to hold prices for the new financial year at the levels already implemented and planned, and to stand by our customers, rather than set pricing against these highly volatile input costs and exchange rates.”
The business said the decision is “in the best interests of Primark”, which will support its “everyday affordability and price leadership” and help it grow market share.
Mr Weston added: “Sales, margin and profits at Primark increased significantly as more normal customer behaviour resumed after the pandemic.
“Significant progress was made in building out Primark’s digital capability, which will be a key element in the future development of Primark.”
The business is currently trialling click-and-collect in 25 shops.
Primark like-for-like sales have broadly returned to pre-Covid levels in the UK, but remain weaker in continental Europe.
Despite rising costs, it was a good year for AB Foods – which also includes British Sugar, which makes sugar from sugar beets and grows medical cannabis.
The business said revenue jumped by more than a fifth to £17 billion in the year to September 17, as pre-tax profit increased by nearly half to £1.1 billion.
The food business is expected to grow sales significantly this year as it hikes prices for customers, and AB Foods will also bring in some extra cash from the already planned price rises at Primark.
But adjusted operating profit is expected to fall as the business faces cost increases.
It announced an 8% increase in dividends to 43.7p per share, and promised to buy back £500 million in shares from investors.
Richard Lim, boss of the Retail Economics consultancy, said: “These are impressive results against the harsh economic backdrop.
“The retailer is well-positioned to benefit from consumers who are trading down and putting lower costs at the heart of their buying decisions.
“Many shoppers are prepared to sacrifice perceived quality and the convenience of online delivery for lower costs and it’s driving people back into stores across parts of the sector.
“However, there’s a perfect storm of cost pressures facing the retailer from spiralling input and operating costs and the impact of a weaker pound and rising interest rates.”