Primark suffers fall in UK sales despite solid Christmas
Shares in the fashion chain's parent firm rise sharply as it reports improved trends across much of its divisions.
Thursday 16 January 2020 16:53, UK
Primark has reported a "marginal decline" in comparable UK sales during the trading period covering Christmas.
The discount fashion retailer's owner, Associated British Foods (ABF), gave no actual figure for the fall in like-for-like sales - a measure of business recorded by the same number of stores a year ago.
However, it said new stores and expansions meant UK revenues were up 4% in the 16 weeks to 4 January.
Total Primark sales were up 3% - aided by like-for-like sales growth in the US and eurozone.
Commenting on the growth in total UK sales, ABF said: "As a consequence we delivered a further increase in share of the total clothing, footwear and accessories market.
"Trading was particularly good over November and December.
"Sales in the eurozone were 5.1% ahead of last year at constant currency as a result of the increase in selling space and like-for-like growth, with strong progress in France and Italy."
Primark has been among the consistent performers in UK retail as many chains with deep exposure to the high street continue to struggle in the face of weak consumer confidence and high costs.
As rivals strive to grow businesses online to cut costs, Primark has rigidly stuck to its store roots which are underpinned by a commitment to fast fashion at low prices.
Its trading update signalled that its expansion in Europe would continue apace.
The brand is to open 18 new stores in 2020 - focused on eastern Europe with its first stores in Poland, Slovakia and the Czech Republic.
ABF shares rose 4%.
The wider group reported a 4% increase in revenues over the period.
It was bolstered by a pick-up in its sugar business and improved margins in its grocery arm.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said of the update: "Primark is proof not every retailer struggled this Christmas, and the upturn in Europe is welcome news, particularly Germany where conditions have been tough.
"What's most striking about Primark is it's essentially an old school retailer. Lack of a meaningful online business makes the chain a high-street play, so the improvement to sales performance is even more impressive.
"Within the UK, repeat business did dip slightly, but new store space is offsetting that - which has been the tactic for a while now."