BUDGET fashion chain Primark is forecast to have been among the winners over the Christmas period as cost-conscious consumers continue to favour cheaper brands.
While clothing sales at rivals such as Debenhams and Marks & Spencer suffered as they were forced into aggressive discounting in the run up to Christmas, Primark is expected to have fared well from its value proposition when it reports on Thursday. The chain, which is owned by Associated British Foods, saw profits rise 44 per cent in the year to 14 September.
AB Foods said last month that Primark’s like-for-like sales were up again in the first two months of its latest financial year, despite “exceptional” hikes seen a year earlier, when sales surged 25 per cent in the festive quarter.
Primark expects to add more than one million of square feet of selling space this year as its appeal shows no sign of slowing. Last month the chain opened the first of five stores planned in France. Primark will be the engine of growth again for AB Foods this financial year, although solid progress is also expected from its grocery division, which includes kitchen cupboard brands Ovaltine, Ryvita and Silver Spoon.
The grocery arm lifted its full-year profits by 24 per cent to £232 million and AB Foods said last month that it was expecting more profits growth this year. But its sugar business will have faced further pressure amid falling European Union sugar prices, which left the unit’s full-year profits 15 per cent lower at £435m and is expected to drive another fall this financial year.
Primark opened its first branch, in Dublin, in 1969 under the Penneys brand. The chain expanded into the UK in 1973 and now has more than 250 shops in eight countries.
AB Foods is run by chief executive George Weston, grandson of the group’s founder, Garfield Weston.
The family’s foundation controls Wittington Investments, which in turn has a 54.5 per cent stake in AB Foods.