Primark fuels AB Foods sales rise

Primark-owner Associated British Foods reported a ten per cent rise in first-quarter sales led by its discount fashion retailer and saw further growth ahead despite the effect of higher commodity costs.

The London-based group, which markets Silver Spoon sugar, Twining tea and Ovaltine drinks, said on Thursday its 214 Primark store chain had traded well despite heavy snowfalls across northern Europe in the runup to Christmas.

First-quarter results for the 16 weeks to 8 January saw Primark sales up 12 per cent due to new store openings and "good" like-for-like sales growth, while sugar sales were up seven per cent helped by world sugar prices hovering around 30-year highs.

The group reiterated its cautious outlook that it expects to see unspecified growth in the current year but has warned Primark margins will be hit by high cotton prices as it plans not to pass the extra costs onto its customers.