Discount fashion retailer Primark saw total sales rise 12 per cent year-on-year in it first quarter, according to an interim trading statement released today.
In the 16 weeks ending January 8th retail sales at constant exchange rates increased 13 per cent, as parent company Associated British Foods (ABF) posted group revenue growth of ten per cent in comparison to the same period last year.
Store numbers increased by ten during Q1, with five opening in the UK, two in the Canary Islands, one in Germany and one in Holland.
This increased retail space from 6.5 million sq ft to 6.9 million sq ft by the end of the quarter, with a total of 214 stores currently trading and expenditure on new outlets expected to be higher this year compared to 2010.
Overall trading across ABF’s sugar, agriculture, grocery, ingredients and retail segments for the period was in line with expectations, with operating cash down on last year and net debt below £1 billion.
Q1 results follow on from an exceptional set of full-year results for the retailer in the period ending on September 18th 2010, where the group outlined plans for expansion and further development.
Rising commodity prices will create more pressure on margins this year and the increasing costs of oil, wheat and cotton will combine with low consumer confidence to create difficult trading conditions.
Referring to Primark, an ABF statement released today read: “Operating margin was higher than the same period last year but, as previously highlighted, this is expected to come under pressure primarily in the second half when the increase in VAT in the UK, which was effective from 4 January 2011, combines with the effect of higher cotton prices.
“Primark remains committed to offering the best value on the high street.”