// Primark sales rise over Christmas thanks to demand for value
// The retailer plans to open 17 new stores in 2023
Primark sales climbed 18% to £3.15bn in the 16 weeks to January 7, thanks to a “very strong Christmas period”.
Owner Associated British Foods said that despite the encouraging trading, ”macroeconomic headwinds may weigh on consumer spending” in the months ahead.
Primark had a record week in the run-up to Christmas as cash-strapped shoppers sought value amid rising inflation.
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Like-for-like sales rose 11%, ”supported by higher unit volumes, higher average selling prices and a normalised level of markdown”.
The retailer plans to open a further 17 new stores in the course of the year, the first store in Slovakia and the first in Hungary.
In the UK, there was a step-up in performance with sales 15% ahead of last year, nearly all of which was like-for-like growth.
Trading in Europe, excluding the UK, saw sales up 16% with growth in all markets. Like-for-like sales were 8% higher.
Primark said it is also encouraged by the sales growth of 4% in the US. It plans on doubling selling space in the US in this financial year and opened three stores towards the end of the period – Roosevelt Field, Long Island; Jamaica Avenue, Queens; City Point, Brooklyn – and “all are performing well”.
Primark’s website’s traffic has increased 85% since last year, with double the average pages viewed per session.
The new site has just been launched in the Republic of Ireland, to be followed in the coming months by Germany, Spain, and the US, with remaining markets expected by the middle of the calendar year.
The retailer said it was encouraged by its Click and Collect trial of children’s products in 25 stores in the UK, which was launched last year following high demand.
Primark’s share of the total UK clothing, footwear and accessories market by value, which includes online sales, for the 12 weeks ended 11 December 2022 reached 7%, up from 6.5% in the comparable period last year.
Adjusted operating profit margin was ”better than expected as a consequence of the sales performance” but still ”somewhat lower” than last year as a result of inflation in the cost of bought-in goods, higher freight rates, and labour and energy costs.
“We believe our proposition of great quality at affordable prices and attractive store experience is proving increasingly appealing to both existing and new customers,” ABF said.
“Early trading in this new calendar year has been encouraging but macro-economic headwinds remain and may weigh on consumer spending in the months ahead.”
