Discount fashion retailer Primark continues to benefit from cash-strapped consumers efforts to spend less, forecasting a 5% increase in sales for the six months to 28th February compared to last year in a statement by parent Associated British Foods this morning (Monday Feb 23).
Sales have continued to rise despite recent negative publicity about sweatshop conditions at least one of its UK suppliers (MW Jan 12).
“Trading at Primark has been strong and over Christmas was ahead of our expectations. Sales in the first half were substantially ahead of last year, reflecting the increase in retail selling space and a 5 percent increase in like-for-like sales,” the group reports.
The number of Primark stores will have grown to 187 stores in Britain, Ireland, Spain and its first in the Netherlands by the end of this month. ABF expects to open a further seven stores in the second half, including its first in Germany and Portugal.
Despite Primark’s growth ABF, which produces Silver Spoon sugar, Twinings tea and Jordan’s cereals, says it expects its first half operating profits will be slightly lower than last year.
It forecast its grocery profits will be hit by the same trend that is boosting Primark. Consumer downtrading in the UK is seeing lower sales of premium tea brand Twinnings, and sales of breakfast cereals are lower than last year, it says.
The London-based AB Foods, 55 percent owned by the family of Chief Executive George Weston, will report its full results for the half-year to Feb 28 on April 21.