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Primark sales defy unseasonable weather

Sales at Primark were up 4% for the 40 weeks to 22 June 2019, driven by increased selling space but offset by a decline in like-for-like sales affected by the weather. 

Primark owner Associated British Foods said like-for-like sales at the value retailer were “held back” by unseasonable weather in May compared with the previous year. However, sales improved in June. 

Operating margin in the first half grew to 11.7% from 9.8% in the same period last year. 

European sales were also affected by May’s weather but recovered in June. Spain, Portugal, France and Italy all delivered sales growth. It said trading continued to be weak in Germany. Primark will open a new store in Bonn, Germany, this year. 

“Like-for-likes in the first half were weaker driven by the market in May,” ABF’s finance director John Bason told Drapers. “However, it’s not indicative of a general slow down for the consumer if you look at the comparative to last year.

“Last year the weather was a big factor but also the feel-good factor of the royal wedding and the run-up to the world cup provided good conditions that haven’t been repeated this year so we shouldn’t see the slow down as a trend.”

US sales remained buoyant and showed “strong” growth. Primark will open stores in New Jersey, Florida and Chicago in the next 12 months. 

Primark opened nine new stores in the third quarter in Belgium, France, Germany, the Netherlands and Slovenia and in the UK in Hastings, Bluewater in Kent, Milton Keynes and Belfast. 

The retailer’s Birmingham store was relocated to a new 160,000 sq ft unit – Primark’s largest to date.

“For Birmingham, we tripled the space so would have expected a pick up in sales but we didn’t expect quite what we got. Sales density is very strong for such a big store,” said Bason. “We had tremendous success with Bordeaux - giving an indication of how we continue to do well in France and our first store in central or eastern Europe in Slovenia has been a runaway success.” 

Bason noted that Primark’s sustainable cotton ranges, including its denim collection, have performed well across markets, and licensed product continues to be a strong performer for the retailer. 

This year marks Primark’s 50th anniversary. Since opening its first store on Mary Street, Dublin in 1969, Penneys has grown to an international powerhouse with 372 stores in 12 countries, more than 75,000 employees and over 15 million sq ft of retail space.

“The past 50 years is a reflection on Primark incessantly innovating and remaining relevant,” said Bason. “There can be no doubt that we’re currently outperforming the market. It’s a reflection on 50 years spent building on a very successful, internationally successful brand across the piece.” 

 

 

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