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Record Christmas sales at Primark boost revenues for owner ABF

The owner of Primark and Twinings has reported a boost in sales, as it said inflation has become less volatile and consumer spending proved to be more resilient than it expected.

Associated British Foods (ABF) saw its group revenues jump by 16% at constant currency rates over the four months to January 7, compared to the same period last year, to £6.7 billion from £5.57 billion.

It boasted record sales at budget fashion chain Primark in the week leading up to Christmas Day, marking a much stronger festive period than the retailer was anticipating.

Sales in the UK were up by 15% over the four-month period and the chain’s share of the clothing, footwear and accessories market jumped to 7% from 6.5% last year.

Visitor numbers to stores were strong in major cities as well as on high streets and retail parks, ABF said.

It also enjoyed a surge in online visitors since improving its website, with UK website traffic jumping by around 85% since last year, with the retailer recently launching a “click and collect” trial of children’s products in 25 stores.

The group noted that Primark’s low prices were appealing to existing and new customers but that economic conditions could weigh on consumer spending in the months ahead.

Its food business, which includes brands British Sugar, Twinings and Ovaltine, also saw a sales boost but the firm said this was largely achieved by increasing prices to recover significant cost inflation.

It still faces substantial cost pressures but inflation has become less volatile and some commodity costs have recently declined, ABF told investors.

Despite sales growth, it also stuck by previous guidance that its full-year adjusted operating profits and earnings would be lower than the previous year.