Primark sales surge 59% but prices set to rise

·2-min read
Primark will raise prices across some of its autumn and winter stock due to soaring inflation. Photo: Danny Lawson/PA Images via Getty
Primark will raise prices across some of its autumn and winter stock due to soaring inflation. Photo: Danny Lawson/PA Images via Getty

Sales at value fashion giant Primark surged by 59% as COVID restrictions are lifted, owner Associated British Foods (ABF) said.

Sales rose to to £3.54m for the 24 weeks to 5 March with an operating profit of 11.7%, Primark owner Associated British Foods (ABF.L) said in its interim results for the six months to 5 March.

Although the brand is well known for its low prices, Primark will raise prices across some of its autumn and winter stock due to "inflationary pressures" that the company is unable to offset with cost savings, according to owner Associated British Foods (AB Foods). UK inflation hit 7% in the 12 months to March 2022.

Shares in AB Foods fell more than 7% in early trading in London on Tuesday.

Prices for Primark's spring and summer ranges are not set to increase, according to the firm.

The UK and Ireland saw strong sales recovery in 24 weeks to 5 March with increased holiday travel and socialising as COVID restrictions came to an end.

The fashion chain was also trading well in its US markets although consumer footfall remained weak in continental Europe, AB Foods said.

COVID restrictions and lockdowns impacted Primark more heavily than some rivals because the chain does not have an online business to fall back on. Looking forward, Primark said it is working on transforming its digital capability and launching a new website.

Read more: UK households face £271 rise in food bills

Rising costs are set to weigh on Primark’s performance in the second half but AB Foods still expects the chain to achieve an operating margin of 10% for the full year.

In January, Primark said it plans to cut 400 jobs to reduce costs.

AB Foods saw half-year sales and operating profit return to pre-COVID levels but the group forecast a bigger drop in margins this year than previously expected for all its food businesses due to increasing raw materials, commodities, supply chain and energy costs.

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