Owner Associated British Foods “remains confident in the Primark proposition” despite falling sales.
Unseasonal weather and shaky consumer confidence has contributed to a dip in Primark’s UK sales.
In a trading update for the 16 weeks to 4 January 2025, Primark’s owner Associated British Foods (ABF) posted retail revenues in the quarter of £3.362m, with total group revenues standing at £6.732m.
Overall, Primark’s total like-for-like sales declined by 1.9%, due to lower sales in the UK and Ireland. Accounting for 45% of group sales, UK and Ireland sales fell 4% and were down 6% on a like-for-like basis.
In a call with investors today (23 January), ABF CEO George Weston said he’s “hopeful” for the performance in Primark’s UK market. Despite overall falling sales, there was growth in like-for-like sales over the Christmas period, offset by weaker autumn trading amid “a challenging retail environment”.
The retailer puts the drop down to a “cautious consumer sentiment” and a “lack of seasonal purchasing” due to unseasonal weather, with Weston adding in the call that “both footfall and units per transaction in the slow market” have driven sales down.
He added that the “behaviour of the less affluent consumer in the UK is really difficult to predict”, as consumers increasingly “worry about job security” and have perhaps “less disposable income”. Yet Weston also said he’s “not nearly in as gloomy as a place about that shopper as some of the commentary might be, because [the shoppers] do have the money”.
We’re not losing customers. In fact, we’re the winners in the switching data analysis.
George Weston, Associated British Foods
Challenging performance in womenswear was “most impacted by weaker sales in cold-weather and seasonal clothing”, although Primark reported “strong sales of performance, leisure and nightwear”.
Sales of menswear and kidswear grew in the period, and there was strong performance in the Christmas product range, licensed products and the Rita Ora, Paula Echevarría and Kem collections.
“We’re not losing customers. In fact, we’re the winners in the switching data analysis, meaning some of our shoppers have just stopped shopping and that’s what’s driven our market share down,” said Weston.
The company says it “remains confident in the Primark proposition”, as it plans to “focus on initiatives across product, digital and brand to drive underlying growth”.
Primark has been increasing its digital offer, expanding its click-and-collect offering in the UK as a “cost initiative”, which is now available from 113 stores. The retailer expects the offering to be expanded to most stores by the end of the year, as Weston explained “digital engagement has grown really well”.
Alongside this, ABF finance director Eoin Tonge said the brand “firmly believes in digital, whether its technology or in brand”.
Weston claimed “paid advertising works quite well for Primark” and praised the “strong” collaborations the retailer has been running. According to the ABF CEO, Primark can “communicate events and ranges much better than it used to, and paid marketing is part of that mix”.
Tonge added that Primark’s gross margins continue to be good” and “markdown continues to be managed very well”, while stock loss isn’t getting worse.
