Primark, the budget-focused retailer owned by Associated British Foods, has reported strong sales in the UK and US markets. Despite challenges in some European markets, the company expects total sales for the financial year to reach £7.7 billion, representing a significant increase from the previous year.

Sales in the UK have shown improvement, with like-for-like sales 13% higher than the previous year and sales densities exceeding those of the third quarter. Remarkably, Primark has maintained its share of the total UK clothing, footwear, and accessories market value, even without an online presence. The Republic of Ireland also performed well, with consistent like-for-like sales close to pre-pandemic levels.

However, Primark faced difficulties in Continental Europe, experiencing weaker-than-expected performance. Signs of customer caution regarding spending were observed across all markets in the region. While Q4 total sales are expected to be 5% higher than the previous year, like-for-like sales in Europe are 18% behind pre-Covid levels from three years ago. Moreover, footfall did not improve in European markets during the quarter.

The company encountered challenges in specific European markets, including an extreme heatwave in Iberia, which hindered sales. In France, customer footfall fell short of expectations, particularly in the suburbs of Paris. Sales in Germany have not returned to pre-pandemic levels, prompting the company to consider taking further action to reposition its business in this market. On the other hand, sales in Italy increased by 20% in Q4 compared to the previous year, partly attributed to the opening of four new stores.

In contrast to the European markets, the US market continues to perform well for Primark. Q4 sales in the US are expected to be 27% higher than pre-Covid levels, driven by new store openings and strong like-for-like sales.

Primark has been expanding its store presence, adding 0.4 million sq ft of trading space during the financial year. The company plans to open three more stores before the year ends, and there are expectations for a new store opening in New York in the next financial year. In addition, the launch of Primark’s new UK website has been met with positive reception and has seen good engagement from customers, particularly with the stock-checker feature.

Looking ahead, Primark anticipates sales growth to come from the increase in retail selling space as well as like-for-like growth resulting from price increases implemented for AW22 and planned for SS23. However, the company does not plan to introduce further price increases, considering the recent strengthening of the US dollar against sterling and the euro, along with volatile and higher energy costs. Primark believes that abstaining from additional price increases is in the best interest of the brand and aligns with its core proposition of everyday affordability and price leadership.

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Primark’s new store openings
Primark’s fashion offerings