Primark set to slash jobs after Christmas sales hit by Omicron impact

Around 400 jobs are set to be axed across fast fashion chain Primark's UK stores as the group looks to overhaul its retail management team.

The retailer, which is owned by Associated British Foods, has launched a consultation with staff as part of plans to simplify its UK store retail management structure.

While it is creating a new management level role as part of the move, it also stripping out other roles and expects the changes to leave it with around 400 fewer retail managers. Primark, which has 29,000 staff across 191 stores in the UK, expects the consultation to take place over the next couple of months.

Sign up to our daily newsletter

Read More

Read More
Former John Lewis site in Aberdeen city centre going on sale
Primark said it expects sales to be 'significantly' higher year on year between now and April. Picture: Lesley Martin/AFP via Getty Images.

Kari Rodgers, Primark retail director for the UK, said: "The changes we're proposing will deliver a simplified and more consistent management structure across all of our stores, provide more opportunities for career progression, and offer greater flexibility.

"We are now focused on supporting our colleagues who are affected by these proposed changes and will be going through the consultation process."

Details of the job cut plans came as Primark revealed that it had seen a hit to recent trading as the Omicron variant of coronavirus kept shoppers away from stores.

The group said Primark's UK like-for-like sales were 10 per cent lower in the 16 weeks to January 8 when compared with pre-pandemic levels two years ago, with so-called shopper footfall hit by the rapid rise in Omicron cases.

But AB Foods said shopper numbers and trading had since improved as Omicron fears ease and added that like-for-like sales were higher when compared with a year earlier, when stores were shut due to lockdown measures.

John Bason, finance director at the group, said: "Omicron caused a dip in the road for Primark in the UK and Ireland. We've already seen weeks bouncing back from that here, but elsewhere in Europe this will take a little longer as they are not quite at peak Omicron in some countries."

Offsetting

Total group-wide Primark sales were 36 per cent ahead year on year, the firm also said. AB Foods – whose shares closed down 4.2 per cent at 2,042p – said supply chain problems had begun to ease since last autumn, although it is still seeing some delays. The group is offsetting higher costs by slashing store operating costs and overheads.

Mr Bason also said Primark "will not raise prices" and will therefore find savings elsewhere in the business. However, he said the "situation is different" in the group’s grocery operation, as he highlighted soaring commodity costs that have affected key ingredients such as wheat.

Primark said it expects sales to be "significantly" higher year on year between now and April. "It is difficult to predict future trading conditions with certainty, but we have seen an encouraging improvement in footfall in the UK and Ireland as the disruption from Omicron reduces," the group said.

Richard Lim, chief executive of Retail Economics, flagged a “sober tone” to the results. "In the final run-up to Christmas, the retailer was dealt a significant blow as many consumers chose the safety of their homes instead of venturing out onto the high street to avoid catching Omicron before the big day. With no transactional website to lean on, Primark was left frustrated as vital sales were mopped up by their competitors."

A message from the Editor:

Thank you for reading this article. We're more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers.

If you haven't already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription.

 0 comments

Want to join the conversation? Please or to comment on this article.