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The parent company of Primark has seen group revenues hold steady at £6.7bn in the 16 weeks to 3 January, despite Primark like-for-like sales falling by 2.7% over the period. While Associated British Foods (ABF) saw total group revenues rise by 1% at actual exchange rates, it fell by 0.9% on a constant currency basis. Growth in the UK and US markets helped offset a downturn in continental Europe, where comparable sales dropped 5.7%.
Total retail revenues grew by 4.2% to £3.5bn during the period, while the grocery division remained steady with revenue of £1.4bn, while the sugar, agriculture, and ingredients segments all reported declines in turnover.
Earlier this month, Primark warned that profits this year will be lower than previously expected after a sharp fall in sales across continental Europe, prompting heavier discounting to clear stock.
ABF said sales growth at the fashion chain in the first 16 weeks of the financial year was below expectations, with like-for-like sales in Europe down 5.7% as consumer confidence remained weak.
The owner of Primark said the tougher trading environment had led it to increase markdowns significantly to manage inventory levels, weighing on profitability. It now expects Primark’s sales growth in the first half of the 2026 financial year to be in the low single digits.
If current sales trends continue into the second half, the group said Primark’s adjusted operating profit margin for the full year would be about 10%, broadly in line with the first half but lower than last year, which included a £20m one-off benefit.
In contrast, trading in the UK was more resilient, with Primark reporting total sales growth of around 3% and like-for-like growth of 1.7% despite a difficult clothing market over Christmas. The retailer said it gained market share during the period.
Last year it was reported that ABF was reviewing its group structure in a move that could result in the separation of its Primark and food operations.
At the time, the company said no decision had yet been taken, but the review was aimed at “maximising long-term value” across the business.
The process was conducted in consultation with ABF’s largest shareholder, Wittington Investments, which said it remained committed to keeping majority ownership of both the retail and food divisions.
