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Primark reports recent trading "ahead of expectations"

Tom Shearsmith
10 December 2021

Primark owner Associated British Foods (ABF) has reported that trading has been better than expected over the last three months, despite problems at ports and on roads.

In an update at ABF's Annual General Meeting today, Chairman Michael McLintock said: "Primark trading year to date has been ahead of expectations with improved like-for-like sales compared to the fourth quarter of our last financial year. We are managing disruption in our supply chain by prioritising products most in demand with the support of our logistics providers for whom we are a very important customer. We have stock cover on the vast majority of lines for the important Christmas trading period.

"Primark margin year to date has been ahead of expectations. Looking ahead we currently expect Primark sales to be significantly better than sales in the comparable period in the last financial year, from December 2020 to April 2021, when the estate was largely closed."

Since the year end Primark has opened two new stores, one in Spain and one in, Italy, bringing its total estate to a milestone of 400 stores, trading from 17 million sq ft.

Recent worries over the new COVID-19 variant have however brought some consequences. Primark stores in the Netherlands have been hit by restrictions in trading hours, in Germany customers need vaccine passes, while its five shops in Austria have all closed.

But in the months ahead things are unlikely to get worse than they were at the same time last year, when most of the chain’s shops were closed. Between December 2021 and April 2022 sales are expected to be “significantly better” than in the same period a year earlier.

The business also has several other wings, including grocery, sugar, ingredients and agriculture; these have all traded in line with expectations since the start of the financial year in September.

“We have seen an escalation in the cost of energy, logistics and commodities and we have been implementing plans to offset these through operational cost savings and, where necessary, the implementation of price increases.” McLintock added.

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