Primark is taking advantage of rising prices and colder weather as it sets its sights on a great Christmas.
In the latest sign of life on the High Street, the fashion retailer said sales in the 12 months to September 16 were £9 billion, up 17 per cent on the previous year.
Profits rose 30 percent to £717 million. And George Weston, CEO of Primark parent company Associated British Foods, said the arrival of typical autumn weather in recent weeks, following an unusually warm spell in September, had further boosted sales.
“The weather turned around about three weeks ago and sales are very good,” he said, adding that the company was “absolutely thrilled” by the response to the collaboration with singer Rita Ora.
Weston also noted that consumers have started their holiday shopping early this year.
Cashing in: Primark said sales in the twelve months to September 16 were £9 billion, up 17% on the previous year
“We are a third ahead of the same time last year in terms of Christmas ranges,” he said.
‘I feel optimistic. The value we offer is particularly relevant this Christmas. We have confidence in it.’
The strong performance at Primark saw sales at ABF – whose food and ingredient brands include Kingsmill bread, Ryvita crackers and Twinings tea – rise by 16 per cent to almost £20 billion. Profits rose 25 percent to £1.3 billion.
ABF shares rose by 6.8 percent.
Primark said customers were shaking off ‘selective price increases’, while stores – especially the Oxford Street flagship – saw increased footfall last year as shoppers returned to the High Street in droves.
Products flying off the shelves in recent weeks include a £23 long cardigan and £18 gray tie-dye dress, both from the Rita Ora collection.
Weston said the 32-year-old singer was a “completely authentic” brand ambassador who had shopped at the Hammersmith store as a teenager. A second Rita Ora range was launched in stores yesterday.
It follows successful collaborations with celebrities including TV presenter Stacey Solomon and Barbie brand Mattel.
Some prices would rise “a little” in the first half of the current fiscal year, Weston said, but there were “no plans” to increase prices in the second half. Prices will even be reduced for many products in the children’s section.
Good news about prices at the tills came as Primark said lower material and transport costs signaled a ‘substantial recovery’ in profit margins in the coming year.
It was “encouraged by early results” from a Click and Collect trial for womenswear, alongside an existing service for childrenswear.
Primark is also on track to expand its store base from 432 to 530 stores by the end of 2026.
Chris Beckett, head of equity research at Quilter Cheviot, said Primark “has weathered the cost of living crisis relatively well”, while ABF’s food businesses “have also coped well with this high inflation”.
Primark’s confidence in its stores mirrors that of several competitors.
Marks & Spencer is expected to sound an optimistic tone when it publishes its first half results today.
And it follows a positive update from Next last week.