Primark "performing well" in tough market

Clothing chain Primark has continued to perform strongly despite the tough consumer environment and expects annual sales growth of six per cent, owner Associated British Foods (ABF) said.

The strength of sterling against the dollar helped the chain when goods were bought in the dollars because of a favourable exchange rate, the company said.

However it said the hike in VAT increase, rises in transport costs and cotton prices would squeeze margins.

The sales growth forecast is on a like-for-like basis which strips out the effect of new stores. It covers the year to 18 September.

ABF expects to have opened eight new Primark stores in the six months to that date – five in the UK and three in Spain.

The firm's other businesses also include Silver Spoon sugar and the UK's Allied Bakeries.