The parent firm of Primark has revealed a jump in profits and sales as shoppers continued to shop “enthusiastically” at the fashion chain despite price rises and budget pressures.
Associated British Foods which also runs large grocery, ingredients and agriculture operations, said the backdrop is still “challenging” for consumers but stressed that it has seen inflationary pressure ease over the past year.
It said company profits jumped by a quarter to £1.34 billion over the year to September 16, compared with a year earlier, as it was boosted by Primark.
AB Foods added that profit from the fashion retailer, which has 432 shops globally, is set to see profits rise further as it benefits from lower raw material and freight costs.
During the past year, Primark implemented “selective price increases” for shoppers after reporting a spike in costs to make products and operate shops.
On Tuesday, the group revealed that Primark sales surpassed expectations from last year as demand increased across its markets despite the increased pricing.
Primark sales grew by 15% to £9 billion for the year, with 11% growth in the UK.
It hailed the sales performance in the face of poor weather conditions over the final half of the year, which impacted high street footfall.
As a whole, AB Foods group revenue increased by 16% to £19.7 billion for the year, as it was also boosted by higher pricing in other areas.
Sales in its grocery business, which includes brands such as Twinings, Ryvita and Patak’s, grew by 12% to £4.2 billion after passing higher costs on to consumers.
It said this division was buoyed by an improved performance in its Allied Bakeries business, which makes Kingsmill bread.
However, AB Foods said Ryvita continued to “underperform” over the year but has seen early positive results following a brand relaunch.
George Weston, chief executive of Associated British Foods, said: “At the outset of this financial year the group was facing very significant economic challenges caused in part by major geo-political events.
“Looking back on the year, it is clear to me that the group performed extremely well and is as a result now well positioned for the year ahead.”