Record Christmas sales at Primark boost revenues for owner ABF

The owner of Primark and Twinings has reported an increase in sales, as it said inflation has become less volatile and consumer spending proved to be more resilient than it expected.
By Greg Wright
Published 24th Jan 2023, 09:15 BST
Updated 24th Jan 2023, 10:34 BST

Associated British Foods (ABF) saw its group revenues jump by 16 per cent at constant currency rates over the four months to January 7, compared to the same period last year, to £6.7bn from £5.57bn.

It boasted record sales at budget fashion chain Primark in the week leading up to Christmas Day, marking a much stronger festive period than the retailer was anticipating.

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Sales in the UK were up by 15 per cent over the four-month period and the chain’s share of the clothing, footwear and accessories market jumped to 7 per cent from 6.5 per cent last year.

The owner of Primark and Twinings has reported a boost in sales, as it said inflation has become less volatile and consumer spending proved to be more resilient than it expected.The owner of Primark and Twinings has reported a boost in sales, as it said inflation has become less volatile and consumer spending proved to be more resilient than it expected.
The owner of Primark and Twinings has reported a boost in sales, as it said inflation has become less volatile and consumer spending proved to be more resilient than it expected.

Visitor numbers to stores were strong in major cities as well as on high streets and retail parks, ABF said.

It also enjoyed a surge in online visitors since improving its website, with UK website traffic jumping by around 85 per cent since last year, with the retailer recently launching a “click and collect” trial of children’s products in 25 stores.

The group noted that Primark’s low prices were appealing to existing and new customers but that economic conditions could weigh on consumer spending in the months ahead.

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Its food business, which includes brands British Sugar, Twinings and Ovaltine, also saw a sales boost but the firm said this was largely achieved by increasing prices to recover significant cost inflation.

It still faces substantial cost pressures but inflation has become less volatile and some commodity costs have recently declined, ABF told investors.

Despite sales growth, it also stuck by previous guidance that its full-year adjusted operating profits and earnings would be lower than the previous year.

Chris Beckett, head of equity research at Quilter Cheviot, said: “Associated British Food’s latest trading update showed strong sales growth from all divisions but management still expect a profit decline this year as inflation continues to have a significant effect on margins.

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“The business continues to take advantage of the retail recovery story following Covid, while inflation has also been positive for ABF’s prices. Primark in particular enjoyed a very strong Christmas period, growing sales across the world and ahead of management expectations. Primark has previously indicated that it has prioritised sales recovery at the expense of short-term profitability, but it will be looking for future innovation to help boost the later. On that note, the click and collect trial on children's clothes in the north east is described as 'encouraging'."

Related topics:Primark