Primark’s parent company, Associated British Foods, has reported sales for the first half were 17% ahead of last year for the retailer – with trading being ‘significantly better’ than expected.
Like for like sales were 10% ahead of last year, driven by higher average selling prices and high unit volumes.
Footfall increased in both the UK and Europe, with stronger sales driving operating profit margin up to 8.3%, higher than expected at the start of the financial year.
In the UK, total sales were 15% ahead of the same period a year ago, driven by like for like sales growth of 15%. Footfall also strengthened on high streets and in retail parks, as well as being significantly better in Primark’s destination city stores.
The strength of these sales is evidenced by the out performance of Primark’s share of the total UK clothing, footwear and accessories market by value including online sales. The latest 12-week data to 5 March 2023, showed Primark’s market share increased from 6.2% last year to 6.5% this year.
Total sales in Europe – excluding the UK – were 18% higher, with an increase in like for like sales of 8% with higher average selling prices and footfall. The like for like performance was driven by much improved performances in the major markets of Spain, France and Germany.
The first half also saw Primark open 10 stores in Europe including in Bucharest in Romania, and Bari and Caserta Naples in southern Italy.
Over in the US, total sales were 11% higher with good trading across the 16 stores. In the coming months, Primark is expecting to sign leases for stores across southern states of the US including locations in Texas.
The retailer is also continuing with its digital development. Its much-improved website was launched in the UK a year ago, followed by the Republic of Ireland before Christmas, Germany and Spain after the half year end, with Italy, US and France the next to follow. All remaining markets will follow over the summer.
Primark has seen a significant increase in customer traffic where the new website has been introduced, and importantly the stock checker facility is being used by a significant number of customers. The retailer believes that the website has contributed to like for like growth in the relevant markets.
The Click and Collect trial of children’s products in 25 stores in the north of England and Wales was launched in late November and continues with encouraging results. Notably, Primark has confirmed that it will be extending the trial to 32 stores which are broadly within the M25 region by late summer.
We were very pleased with the improvement in Primark sales, which recovered strongly from the second half of the last financial year and drove operating profit margin up to 8.3%, higher than we had expected,” commented George Weston, chief executive at Associated British Foods. “Primark has been very successful in this period in attracting new customers with its proposition of good quality merchandise combined with price leadership and well invested stores.
“We have had a very strong contribution from new stores opened in the period, and today we are announcing plans for the development of our Primark business in southern states of the US.”