Primark reports 36% rise in revenues but warns of 400 job losses
Primark owner Associated British Foods (ABF) has reported revenues rose 36% year on year to £2.7 billon for the 16 weeks to 8 January 2022 but has warned of 400 job losses in an upcoming UK store management overhaul.
Primark's total sales were 5% lower than pre-COVID levels in the same period two years ago. Like-for-like sales were 11% below.
Stores in retail parks and town centres continued to outperform destination city centre stores with like-for-like sales in retail parks ahead of pre-COVID levels. Since the start of the pandemic, the group have opened 25 new Primark stores, lifting its retail selling space by 7%.
Sales in UK stores were "well ahead of 2021" for the 16 weeks, with trading only slightly impacted by a decline in footfall as a result of the Omicron variant. Like-for-like sales were 10% down on pre-pandemic levels. The company confirmed that trading "has improved in recent weeks".
The pressure of disruption to the supply chain experienced in the Autumn has alleviated, although the company reports it is "still experiencing some delays in dispatch at ports of origin" and expects longer shipping times to continue for some time.
Primark said it expects sales to be “significantly” higher year-on-year between now and April, with all its stores open.
The company also confirmed that 400 jobs are set to be axed across UK stores as it looks to simplify its UK store retail management structure, aiming to “provide clearer accountability, greater flexibility and more management support on the shop floor”.
While it is creating a new management level role as part of the move, it also stripping out other roles and expects the changes to leave it with around 400 fewer retail managers.
The company confirmed it has commenced consultations with staff, expecting the process to take place over the next couple of months.
Kari Rodgers, Primark Retail Director for the UK, said: “The changes we’re proposing will deliver a simplified and more consistent management structure across all of our stores, provide more opportunities for career progression and offer greater flexibility. We are now focused on supporting our colleagues who are affected by these proposed changes and will be going through the consultation process.”