Primark boss warns shoppers are still struggling
Primark’s boss warns shoppers are still struggling as the company posts low half-year profits
Primark’s owner’s boss warned that consumer confidence is “still very low” as the company posted a flat half-year profit.
Associated British Foods CEO George Weston said the 24 weeks to March 4 were “marked by extreme and volatile inflation” at the fashion retailer and its food divisions. Profit for the period was £644 million, just 1 per cent higher than last year.
Weston told the Mail that shoppers’ enthusiasm for buying new clothes had “improved a bit” during the cost-of-living crisis.
But he said, “Consumer confidence is still very low.”
Associated British Foods chief exec George Weston (pictured) said the 24 weeks to March 4 were ‘marked by extreme and volatile inflation’
Sales in the UK were up 15 per cent as shoppers returned to the low-cost fashion retailer’s High Street stores and retail parks, compared to the previous year.
“We’ll be able to tell more as the weather changes and we’ll see what the response to the spring and summer ranges is,” he said. “It’s hard work selling spring or summer clothes when it’s still zero degrees in the morning.”
Products flying off the shelves at Primark include an 80s-style short pink unitard for £10 and a stone sundress for £20.
While product prices were increased, “the company chose not to recoup all of the input cost inflation in Primark,” Weston said, trying to maintain market share for shoppers looking for affordable outfits.
Tentative price increases had hurt profits, with Primark posting £351m for the first half, a 15 per cent drop on the previous year.
ABF maintained previous full-year guidance for earnings and earnings per share to be “broadly in line with” last year.
But Russ Mould, investment director at AJ Bell, said there was “enough cautious news to send ABF’s share price down.”
Shares fell 4.2 percent or 86 pence to 1984 pence yesterday.
The retailer said it wanted to expand its presence in the southern states of the US, including Texas.
And the retailer is expanding the number of stores involved in a click-and-collect trial, which started in 25 stores last year.
Mold said Primark was clearly aware that it would be ‘dangerous’ to avoid an online offer, hence the click-and-collect trial, which ‘clearly went well’ given the rollout.