Primark sales to jump 60% after pandemic recovery
Associated British Foods said its sales and profits are ‘strongly ahead’ of last year.
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Associated British Foods (ABF) has said rebounding business at its Primark fashion stores mean its sales and profits are “strongly ahead” of last year.
The value fashion brand’s parent company said Primark sales are set to jump 60% for the 24 weeks to March 5, compared with the same period last year, due to reduced pandemic restrictions.
It said all Primark outlets remained open throughout the period, apart from short periods of closures in Austria and the Netherlands.
Sales across the company’s UK stores are “well ahead” of last year as shoppers flocked back.
“UK 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,” the company added.
“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.”
Primark added that it has been boosted by the opening of 27 new stores over the past two years.
ABF said the impact of inflation on raw materials and Primark’s supply chain was offset by cost-cutting and currency changes during the half-year.
However, it said its food businesses, which includes brands such as Ryvita and Twinings, has seen profit margins hit by surging costs, and confirmed it will increase the price of some products.
The company said it expects this arm to recover by the end of the financial year as the benefits of price rises and cost savings filter through.
The grocery operation is set to post a 2% jump in revenues compared with the same period last year.
Its Twinings Ovaltine arm “performed well” over the period, but the group’s Allied Bakeries business, which makes Kingsmill bread, reported a decline.
John Bason, finance director at ABF, told the PA news agency that the company has “very minimal” exposure to Ukraine and Russia but recognised the ongoing conflict could have an impact upon the business through wheat prices.
“We don’t have material businesses in Ukraine or Russia so would not expect any particular impact in that respect,” he said.
“But we will see if there is an impact on the commodity markets and there is potential wheat prices could move, as Ukraine is a large producer.
“I must clarify that we don’t source our wheat from there – it’s mainly from the UK – but there is potential for cost impacts so we will keep a watching brief on that situation.”