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The parent company of Primark, Associated British Foods, has announced that Primark’s total sales rocketed by 43% to £7.7bn in FY22, as the group welcomed a “significant” rise in customer footfall and sales densities.
In the UK, like-for-like sales and market shares returned to pre-pandemic levels, though weaker like-for-like sales were seen in Continental Europe due to “cautious” customer sentiment.
Looking ahead to the new financial year, ABF said it expects to make “significant” progress in Primark’s digital development with the launch of a new enhanced website in all markets along with the UK launch of its trial Click and Collect service, set to launch in 25 UK stores.
Having rebuilt the new store pipeline during the last financial year, it also expects to open a net 1 million sq ft of retail selling space in the next financial year, nearly doubling its retail selling space in the year ahead.
In addition, it expects Primark sales growth to be driven by price increases implemented for autumn/winter this year, and those already planned for spring/summer next year, as well as the increase in retail selling space.
However, it noted input cost inflation is expected to be “significant”, with inflation in raw material and energy costs as well as labour rates, alongside higher purchasing costs which arose from the strengthening of the US dollar against sterling and the euro.
In light of reduced consumer disposable income, the group has decided to not implement further price increases on the autumn/winter and spring/summer ranges however, beyond those already implemented and planned.
George Weston, CEO of ABF, said: “The group delivered strong revenue and profit growth this year in a clear demonstration of the benefits of our diversification, brand strength, and of our commitment to disciplined financing and investment. The performance was achieved despite pandemic-induced disruption being followed by high and volatile input cost inflation.
“Sales, margin and profits at Primark increased significantly as more normal customer behaviour resumed after the pandemic. Significant progress was made in building out Primark’s digital capability, which will be a key element in the future development of Primark.”
He added: “Looking ahead, substantial and volatile input cost inflation will be the most significant challenge in the new financial year, and our businesses will continue to seek to recover these higher costs in the most appropriate way.
“Primark has faced significant input cost inflation and sharply moving currency exchange rates. We have decided to hold prices for the new financial year at the levels already implemented and planned and to stand by our customers, rather than set pricing against these highly volatile input costs and exchange rates.”
