Primark sales climb as prices rise and city centre stores boom

theguardian.com:

Primark has reported strong first-half sales growth helped by higher prices and a return of tourists and office workers across the UK’s cities, but said that revenue would slow in the coming months amid the cost of living crisis and higher interest rates.

The retailer’s parent company Associated British Foods said like-for-like sales rose by 10% at the budget clothing chain in the six months to 4 March compared with a year earlier.

In the UK, like-for-like sales climbed by 15%, as Primark attracted more shoppers on high streets and in retail parks, but also in its city centre stores which have become busy again as tourists and office workers have returned.

George Weston, the ABF chief executive, said tourists, such as people taking day trips, were the main reason Primark’s stores in London, Manchester, Birmingham and Liverpool were busier.

Faced with surging energy and freight costs, Weston said the company had raised its prices in the single digits, but “by less than costs, and less than others”, which meant profits suffered. Primark made a first-half operating profit of £351m, down by 15% from a year earlier. Childrenswear prices have been unchanged.

“The need for further price rises has reduced significantly just over the past few months,” he said. “We’re quite confident that most of the price rises that consumers were going to see they’ve already seen. And then I hope we can get back to the world we were in for 10 years where we move prices down, not up.”

The firm said sea freight costs had returned to normal levels, and energy prices had also fallen, although the strength of the US dollar against sterling and the euro is driving up the cost of bought-in goods. Operating costs excluding exceptional items went up by 24% in