Primark pledges no new price rises before autumn 2023 as customers tighten belts
AB Foods said that, as customers tighten their belts, it wants to make sure they still see the brand as a cheap alternative to other high street retailers.
As a result the business will not impose any price rises on its ranges until next summer, apart from those it has already implemented and planned.
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Hide AdChief executive George Weston said: “Primark has faced significant input cost inflation and sharply moving currency exchange rates.
“We have decided to hold prices for the new financial year at the levels already implemented and planned, and to stand by our customers, rather than set pricing against these highly volatile input costs and exchange rates.”
The business said the decision is “in the best interests of Primark”, which will support its “everyday affordability and price leadership” and help it grow market share.
Mr Weston added: “Sales, margin and profits at Primark increased significantly as more normal customer behaviour resumed after the pandemic. Significant progress was made in building out Primark’s digital capability, which will be a key element in the future development of Primark.”
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Hide AdThe business is planning a trial of click-and-collect before Christmas.
Primark like-for-like sales have broadly returned to pre-Covid levels in the UK, but remain weaker in continental Europe. Despite rising costs, it was a good year for AB Foods – which also includes British Sugar, which makes sugar from sugar beets and grows medical cannabis.
The business said revenue jumped by more than a fifth to £17bn in the year to September 17, as pre-tax profit increased by nearly half to £1.1bn.
The food business is expected to grow sales significantly this year as it hikes prices for customers, and AB Foods will also bring in some extra cash from the already planned price rises at Primark. But adjusted operating profit is expected to fall amid cost increases.
It announced an eight per cent increase in dividends to 43.7p per share, and promised to buy back £500m in shares from investors.