23 January 2024 , 08:31
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Primark, the budget fashion chain, has seen a boost in sales over the Christmas period despite the warm autumn weather.
The owner, Associated British Foods (AB Foods), reported that Primark's sales grew by 2.1% on a like-for-like basis in the 16 weeks leading up to January 6, with total revenues at the retailer increasing by 7.9%. In the UK, sales in comparable stores rose by 3.8%.
The company said strong growth in the run-up to Christmas helped balance out the impact of unusually warm autumn weather at the start of the quarter. The increase in Primark's sales was driven by higher average selling prices and strong demand for Christmas ranges and lines such as its collection designed in collaboration with singer Rita Ora.
Despite concerns from many rivals about stock delays and cost increases due to the Red Sea shipping attacks, AB Foods said it did not expect "significant disruption". The company stated: "We continue to monitor the situation in the Red Sea but at this stage we do not expect any significant disruption to our supply chain."
The company believes improvements in profitability across the Primark business "should insulate us well against potential additional costs of supply due to the disruption in the Red Sea should they arise". The group celebrated a record UK market share over the three months to December 10, at 7.1%, according to recent Kantar data.
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On the continent, the story was a bit different for Primark, as like-for-like sales only nudged up 1.3%. In some countries, local economic troubles and comparison with last year's strong performance affected sales.
Meanwhile, in the US, sales surged by a whopping 45% thanks to new store openings. AB Foods, which not only owns Primark but also runs a large food business, revealed that things are on an upward swing and they're expecting "a year of meaningful progress" in profitability. The group's overall revenue also climbed by 5.4% to £6.9 billion in the first quarter, ending January 6.
* An AI tool was used to add an extra layer to the editing process for this story. You can report any errors to [email protected]