Primark rules out further price increases in its new financial year
Primark owner Associated British Foods has said the fashion retailer will not be implementing any further price increases next year beyond those already actioned and planned.
In a pre-close trading statement for its full year results for the 52 weeks to 17 September, ABF said: “We believe this decision is in the best interests of Primark and supports our core proposition of everyday affordability and price leadership.”
The group said Primark’s total sales for the period are expected to come in at £7.7 billion, which will be 40% ahead of the previous year at constant currency.
ABF attributed the uplift to the ending of Covid-19 related restrictions and the resumption of “more normal” customer behaviour. It said a continued improvement in its UK performance was offset by weaker than expected trading in continental Europe in its fourth quarter.
Due to recent movements in currency and energy prices, and the commercial decision to limit further price increases next year, the group said it expects Primark’s profit margin for next year to be lower than the operating profit margin of 8% forecast for the second half of the current financial year.
Primark is aiming to grow its store estate to 530 by the end of its 2026 financial year with the vast majority of outlets being in its growth markets of the US, France, Italy and Spain.
The retailer has recently opened two new stores in Italy and will launch a further three in Czechia, Ireland and Spain before the end of its financial year. This will be followed by the opening of a new store in Queens in New York.
After launching Primark’s new UK website in April, ABF said the retailer is on track to launch a UK trial of a click and collect service in the run-up to Christmas.
