Business

Primark to increase store numbers as boss promises 'no price rises'

The boss of Primark owner Associated British Foods insists the retailer will not increase its prices despite soaring costs

BOSSES at Primark owner Associated British Foods (ABF) have said they plan to open around 130 more stores after hailing a "good" sales performance by the fashion retailer "in the face of continued disruption" during the pandemic.

It came as ABF posted marginally lower profits for the past year as a dip in sales at Primark due to trading restrictions was offset by "strong" sales in its food business.

ABF said its adjusted pre-tax profits fell by 1 per cent to £908 million for the year to September 18, as revenues stayed broadly flat at £13.88 billion.

Primark revealed that like-for-like sales dropped by 12 per cent against pre-pandemic levels, as it continued to be impacted by store restrictions across regions, particularly at the start of 2021.

The group said that Primark lost "a third" of its available trading days due to enforced store closures as part of public health measures.

Nevertheless, it hailed the "strength" of Primark's sales after stores were reopened in the spring.

And its chief executive George Weston insisted Primark will not increase its prices despite soaring costs.

He said: "We haven't increased prices at Primark over the past 10 years and we won't do so this year.

"We have currency difference in our favour and there are other areas we have recognised to find cost savings so won't pass that on."

He added that although the possibility of further trading restrictions cannot be ruled out, he expects Primark to deliver a much-improved margin and profit next year.

"We are now intent on expanding our new store pipeline and investing in technology and digital capabilities to continue improving the performance of the business," he added.

The group said it plans to expand Primark's store estate to around 530 shops from its current 398 locations over the next five years.

ABF said its confidence in Primark's model - which does not operate online despite soaring sales across online retail during the pandemic - remains "unaltered" and stressed its commitment to bricks and mortar retail.

The company said it expects Primark to increase sales "significantly" next year and continue to improve profits.

Meanwhile, Primark is also upgrading its digital presence and will launch a redesigned customer-facing website in the UK next year.

ABF said lower sales from Primark over the past year were partly offset by its strong food and sugar operations.

The company's grocery arm revealed that sales increased by 2 per cent to £3.59 billion for the year.

Mr Weston added: "Our financial performance this year more than ever demonstrates the resilience of the group.

"This comes from the strength of our brands, the diversity of our products and markets, our geographic spread, conservative financing and an organisation design that permits fast and flexible decision-taking."

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