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Primark sales soar 60% as pandemic rebound continues

Primark’s parent company, Associated British Foods has issued an update before entering the close period for its interim results for the 24 weeks to 5 March 2022, with sales at the retailer expected to be well over 60% ahead of last year.

All stores are trading and remained open throughout the half year, except for short periods of store closures in Austria and The Netherlands. This compared to prolonged periods of store closure in the UK and Europe in the first half of last year.

Over the last two years Primark has opened 27 new stores, increasing its retail selling space by 8%. Total sales for Primark are expected to be 4% lower than pre-Covid levels in the same period two years ago.

Operating profit margin has recovered strongly and is now expected to be some 11% in the first half. This brings half year margin close to the pre-Covid levels achieved two years ago.

Like for like sales have improved compared to the final quarter of the 2021 financial year and for the first half are expected to be 11% lower than pre-Covid levels in the same period two years ago.

Customer footfall is picking up again in most markets, particularly the UK and Ireland, ABF reported.

Indeed, sales in UK Primark stores are ‘well ahead’ of last year. Like for like sales have improved and are expected to be 9% below two years ago and total sales are expected to be 8% below two years ago. Stores in retail parks and town centres continue to outperform destination city centre stores with like for like sales in retail parks ahead of pre-Covid levels.

In Continental Europe, meanwhile, like for like sales for the period are expected to be 14% below two years ago, reflecting the continued impact of Omicron on customer footfall. In France, Iberia and Italy – identified as Primark’s major opportunities for growth – like for like sales are now improving. Total sales are expected to be 2% below two years ago which include a 12% increase in retail selling space. ABF is estimating a sales loss of some £32m relating to the short periods of store closures in Austria and The Netherlands during the period.

In addition, the US business continues to outperform the rest of the store estate and is on track to deliver 2% like for like sales growth in the period compared to pre-Covid levels with total sales 35% ahead of two years ago.

Primark also said that the response to its launch of the new collaboration with Greggs in the UK has been ‘strong’, with high levels of engagement across its social channels.

Interim results are due to be announced on 26 April.

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