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Primark forges ahead of expectations in all markets

Trading at Primark has been good in all markets and well ahead of expectations, the retailer’s parent, Associated British Foods, reported this morning (27 February).

Reporting its first half results to 4 March, ABF said that total sales at Primark are expected to be £4.2 billion, 19% ahead of the same period last year at actual exchange rates and 16% ahead at constant currency.

Adjusted operating profit margin for the half year is now expected to be above 8%.

Footfall ‘increased strongly’ in both the UK and Europe. Last year sales were disrupted by the consumer reaction to Omicron from December, which resulted in a reduction in footfall, and store closures for a period in the Netherlands and Austria. Covid-related public health measures remained in place in a number of European countries into the spring.

Trading in the UK was particularly strong and ABF expects sales for the half year to grow by 15% driven by an increase in like for like sales of 14%.

Primark’s share of the total UK clothing, footwear and accessories market by value, including online sales, was higher as a consequence, as evidenced by the latest 12 week data to 8 January 2023, which shows Primark’s market share continued to outperform, increasing from 6.3% last year to 6.8% this year. Footfall remains strong in major city centres, as well as on high streets and retail parks.

Into Europe (excluding the UK), and total sales are expected to increase by 18%, while sales growth of some 12% is expected in the US.

Looking ahead to the second half, and ABF remains ‘cautious about the resilience of consumer discretionary spending in the face of continuing inflation in the cost of living and higher interest rates’.

In addition, the roll out of Primark’s improved website continues – already operational in the UK and the Republic of Ireland, the website is on track to be available to customers in Germany, Spain, France and the US soon, with the remaining markets expected by the middle of the calendar year.

The Click & Collect trial of children’s products in 25 stores in the UK was launched in late November and continues.

Retail selling space also continues to increase – at 4 March 2023, Primark will be trading from 419 stores, with 13 new stores having been opened during the period including its first in Romania.

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