Primark owner ABF set to report sales drop despite rising UK sales

 
Helen Cahill
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Retail Results Demonstrate The Changes On The High Street
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Primark owner Associated British Foods (ABF) is forecast to unveil a sales drop this week, but analysts say the brand is performing well in the UK.

ABF will publish its first quarter trading update on Thursday, giving an insight into how it fared over the Christmas period.

Read more: Primark hires former Zara head in bid to move up the retailer ranks

Credit Suisse analysts expect the company to announce a one per cent fall in like-for-like sales for the first quarter, but said sales in the UK will be positive.

At the December annual general meeting, Primark's total store space was 14m square feet, after the brand opened five new stores, and relocated another two outlets. Credit Suisse said this would give the company a nine per cent boost in sales at constant currencies. ABF will also benefit from the Trump administration's tax cuts in the US, the analysts said.

Primark and other discount retailers have been tipped to benefit from a squeeze on consumer spending this year.

In November, ABF said its full-year revenues rose 15 per cent to £15.4bn, with operating profit up by 22 per cent to £1.36bn. Primark sales were up 19 per cent year-on-year, rising from £5.95bn to £7.05bn.

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