Primark sees sales fall 17% below normal levels two years ago as Britain’s pingdemic and European restrictions keep shoppers at bay
- Primark owner Associated British Foods says sales were lower than expected
- Before the pingdemic hit, sales were 3% up in the third quarter on two years ago
- In the US, sales were ahead by 3% in the fourth quarter with less Covid measures
Primark’s owner has revealed that its sales were almost a fifth down on normal levels and lower than expected, with the pingdemic keeping UK shoppers at bay.
Associated British Foods, the London-headquartered retailer and food company, forecast that for its fourth quarter to 18 September, the cut price clothing store’s like-for-like sales would be down 17 per cent on two years ago.
Before the pingdemic hit, sales were 3 per cent up in the third quarter on two years ago, reflecting strong trading in the UK and European regions where stores had reopened.
Primark owner Associated British Foods has revealed that four quarter sales were lower than expected with the pingdemic keeping UK shoppers at bay
In Europe, AB Foods said sales in the fourth quarter were impacted by the performance of stores in Spain and Portugal where the decline of foreign tourism caused by restrictions in international travel reduced footfall.
In addition, tight restrictions on store customer numbers were in place in Portugal for most of the period.
Like-for-like sales for both these markets showed a decline of over 30 per cent for the quarter compared to two years ago.
In France, the requirement for the ‘pass sanitaire’ – showing evidence of immunity to Covid-19 – was introduced in early August and led to footfall declines.
Meanwhile, in the US sales in the quarter were 3 per cent ahead of the same period two years ago with minimal public health restrictions in place compared to Europe.
In terms of trends, it said the quarter saw a continuation of demand for ‘comfort living’ with strong sales of leisurewear such as leggings and cycle shorts.
Despite the poor outlook, AB Foods says Primark has seen a significant improvement in trading, as the quarter has progressed, from a weekly decline in like-for-like sales of 24 per cent at the start of the period to a decline of 10 per cent in recent weeks.
Overall, the group has raised its profit outlook for the full 2020-21 year, reflecting strong profit margins at Primark, due to a significant reduction in labour and store operating costs, and a robust performance from its food and sugar operations.
It forecast full-year adjusted operating profit stated before repayment of job retention monies, above last year’s £1 billion ($1.38 billion), excluding the benefit of a 53rd week this year. It had previously forecast it to be in line with the previous year’s outcome.
For the full year, the group now expects AB Sugar to deliver an even greater improvement in adjusted operating profit over last year than previously expected, while Primark’s adjusted operating profit, stated before repayment of job retention scheme monies, is expected to be ahead of last year.