Sales smash records at PrimarkAs shoppers defy the economic gloom
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Christmas sales are breaking records at Primark as shoppers brave the economic gloom to buy new clothes
Primark toasted record sales for Christmas as it stated that the cost of living has had a less dramatic impact on demand for new clothes than feared.
In an upbeat trading statement, the budget chain said revenue was £3.15 billion in the 16 weeks to January 7 – 15 percent more than the same period last year.
Sales in the week leading up to Christmas Day hit an all-time high as low prices drove shoppers to the stores.
Record turnover: Primark, which has partnered with TV presenter Stacey Solomon (pictured), said revenue in the 16 weeks to January 7 was £3.15 million.
John Bason, chief financial officer of Primark owner Associated British Foods, said despite the nervousness over demand this winter, a ‘real drop in spending just wasn’t happening’.
He added: “I’m not saying remotely that some people don’t find it very difficult, we’re all under pressure, but it hasn’t been as dramatic as we thought.”
The update confirmed Primark as one of the High Street Christmas winners alongside rivals such as Marks & Spencer and Next. However, online rivals Boohoo and Asos struggled as shoppers flocked back to the High Street.
Richard Hunter, Head of Markets at Interactive Investor said: ‘Primark is back with a vengeance as shopping habits change.
“As with so many other retailers, especially over the Christmas period, there has been a marked return to physical shopping, to some extent at the expense of higher online levels during the pandemic.”
The return to office work and Christmas parties saw high heel sales boom at Primark, who also collaborated with TV presenter Stacey Solomon (pictured) on a clothing line. Sales of party wear were up 176 percent year-on-year.
Shoppers opted for gently tailored clothing, with women eschewing traditional black and navy blue blazers for bright pink and purple options.
Strong accessory sales were also proof that “people are moving, thank God, and having a good time,” Bason said.
Cozy loungewear also did well, as customers tried to save energy bills by stocking up on cozy ‘snuddies’ – a blanket with hood and sleeves – and velvet leggings.
While New Year’s trading has been “encouraging” so far, bosses admitted that the economic outlook remains bleak and “could weigh on consumer spending in the coming months.”
Although Primark raised prices last summer, it previously promised to freeze them for this financial year, a decision that now “looks well thought out,” Bason said.
The High Street retailer’s click-and-collect trial of children’s products in 25 stores has received a warm response, bosses said. Traffic to the British website has increased by 85 percent since last year.
The retailer pledged to continue rolling out brick-and-mortar stores, with plans to open 17 stores in various international markets this fiscal year.
Primark has 416 stores worldwide. Online fashion retailers such as Asos and Boohoo have issued gloomy profit warnings in recent weeks, with shoppers taking to the high street to avoid postal disruption.
Brick and mortar stalwarts like Marks & Spencer and Next have posted huge sales in recent trade updates, allaying fears the High Street would have a dismal Christmas.
ABF said total group sales were £6.7bn in the 16 weeks to January 7, up 16 per cent from a year earlier.
Shares fell 2 percent, or 37.5 pence, to 1832 pence after it said profits for its British Sugar arm would be affected by bad weather hampering UK sugar revenues.