Primark is cashing in on rising prices and the colder weather as it sets its sights on a bumper Christmas.
In just the latest sign of life on the High Street, the fashion chain said sales hit £9billion in the 12 months to September 16, up 17 per cent on the previous year.
Profits soared 30 per cent to £717million. And George Weston, chief executive of Primark parent company Associated British Foods, said the arrival of typical autumn weather in recent weeks following an unseasonably warm spell in September has boosted sales further.
‘The weather changed about three weeks ago and sales are very good,’ he said, adding that the company was ‘absolutely thrilled’ with the response to its collaboration with singer Rita Ora.
Weston also noted that consumers have started Christmas shopping early this year.
Cashing in: Primark said sales hit £9bn in the 12 months to September 16, up 17% on the previous year
‘We’re a third ahead of the same time last year on Christmas ranges,’ he said.
‘I do feel optimistic. The value we offer is particularly relevant this Christmas. We are confident.’
The strong performance at Primark helped send revenues at ABF – whose food and ingredients brands include Kingsmill bread, Ryvita crackers and Twinings tea – up 16 per cent to almost £20billion. Profits rose 25 per cent to £1.3billion.
ABF shares surged 6.8 per cent.
Primark said customers have shrugged off ‘selective price increases’ while stores – especially its Oxford Street flagship – saw higher footfall last year as shoppers returned to the High Street in their droves.
Products flying off the shelves in recent weeks include a £23 long cardigan and £18 grey tie-dye dress, both in the Rita Ora collection.
Weston said the 32-year-old singer was a ‘completely authentic’ brand ambassador who had shopped at its Hammersmith store as a teenager. A second Rita Ora range launched in stores yesterday.
It follows successful collaborations with celebrities including TV presenter Stacey Solomon as well as Barbie brand Mattel.
Some prices would rise ‘a little’ in the first half of the current financial year, Weston said, but there were ‘no plans’ to hike prices in the second half. Many products in its children’s section will even see prices cut.
Good news on prices at the tills came as Primark said lower material and transport costs signalled a ‘substantial recovery’ for its profit margins in the year ahead.
It was ‘encouraged by the early results’ of a Click and Collect trial for womenswear, alongside an existing service for children’s clothes.
Primark is also on track to increase its estate from 432 to 530 stores by the end of 2026.
Chris Beckett, head of equity research at Quilter Cheviot, said Primark has ‘weathered the cost of living crisis comparatively well’ while ABF’s food businesses had also ‘coped well in this high inflationary environment’.
Primark’s confidence in its stores echoes several of its rivals.
Marks & Spencer is expected to sound an optimistic note when it publishes results for the first half of the year today.
And it follows a buoyant update from Next last week.