Primark hails sales boom thanks to ‘pent-up demand’
- Credit: Victoria Pertusa
Primark has said its sales have beaten expectations since its stores reopened - despite being a bricks-and-mortar only retailer. Where many thousands of other businesses have seen the vast majority of their trade move online, Primark said that sales are “reassuring and encouraging”.
Primark stores have traded “strongly” during the quarter, its owner Associated British Foods said, as it attracted customers for its “value-for-money offering and a welcoming and safe store environment”.
MORE: San Francisco tech giants snap up Norwich financial siteIt said it expects to report around £2 billion in sales since reopening stores until the end of the year.
Sales have been driven by larger customer baskets with transaction sizes initially “significantly higher” than last year due to “pent-up demand”.
The company said sales at stores in retail parks have been higher than last year, while shopping centre and regional high street stores such as the sites in Norwich, Ipswich and King’s Lynn, are broadly in line with their average.
However, the largest stores in major shopping destinations have been hit by a significant slump in footfall amid lower numbers of tourists.
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In the UK, like-for-like sales since reopening are expected to be 12pc lower than the same period last year after being weighed down by weaker performances at Primark’s four largest stores.
It added that the earlier-than-expected reopening of stores means it now expects to book a £150 million hit from unsold inventory, having previously predicted it would face a £284 million exceptional charge.
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ABF said adjusted operating profits at the Primark business are now expected to be “at least at the top end” of its previous forecasts of £300 million to £350 million.
The group said it also expects a “very strong” increase in the aggregate adjusted operating profit for its sugar, grocery, agriculture and ingredients businesses over the last year.
Grocery sales were boosted by a continued jump in retail volumes in its key markets of the US, Europe and Australia.
The company said this was particularly driven by growth in the UK grocery arm and Twinings tea business, although it said revenues were held back by lower sales for Ovaltine and Allied Bakeries arm, which makes Kingsmill bread.