PRIMARK, the budget clothing retailer, has outsmarted its rivals on the high street after reporting a 25 per cent increase in sales yesterday.
Its parent company Associated British Foods (ABF) said the launch of 14 new stores in Spain, the UK, Austria, Germany and the Netherlands helped to lift sales in the 16 weeks to 5 January. Primark now has 256 stores and 8.9m square feet of selling space.
Like-for-like sales growth was also “very strong”, helped by weak comparatives on last year when the unusually warm weather impacted sales of winter clothing, ABF said.
“Even allowing for an easy autumn comparison, this performance is well ahead of expectations,” Panmure Gordon analyst Philip Dorgan said yesterday.
Primark, whose website boasts a women’s denim shirt for £12 and a men’s hooded top for £10, has benefited as recession-hit consumers facing squeezed household budgets have been forced hunt for bargains.
The retailer’s performance contrasts with that of rivals like Marks & Spencer, which posted a 3.8 per cent fall in like-for-like merchandise sales in the 13 weeks to 29 December.
ABF said group revenue was 10 per cent ahead of last year. Revenues were hit by the strengthening of sterling against all of the group’s main foreign currencies except the Australian dollar. Without the impact group revenues would have been up 13 per cent, it said.
The company, which also sells Silver Spoon sugar and Twinings tea, said sales at its profitable sugar business rose 12 per cent in the period, on higher sales volumes and slightly higher sugar prices. But in the UK, poor growing conditions in 2012 led to a lower beet yield and sugar content.
ABF said that this year’s production will be lower at 1.13m tonnes compared with 1.32m last year.