Primark will continue its international store expansion into eastern Europe, the finance director at owner Associated British Foods, John Bason, told Drapers today.
“The markets of focus internationally will remain France, Spain and Italy – there is a lot of growth to go in Italy and room for expansion in Spain,” he said. “Then it will be eastern Europe. We’ve already got plans for Poland to come on stream.”
Sales in the Eurozone were 5% ahead of last year for the 16 weeks to 5 January 2019, and the retailer will open its first store in Slovenia later this financial year.
Primark’s biggest-ever UK store of 160,000 sq ft will open in Birmingham in the spring. Bason promised it would “push the edges” of store experience, but was keen to keep the details under wraps.
Over the next year, Primark Group will add 900,000 sq ft of space to its current 14.8m sq ft portfolio.
Two further stores have been announced to open in the US, in New Jersey and Florida, following the success of Primark’s first US store in Brooklyn.
“We feel as if we’ve got quite a good model in the US enabling us to open new stores,” said Bason. “We’ve got the apparel right and understand the demographic.”
Sales at Primark for the 16 weeks to 5 January were up 4% year on year, although the retailer experienced a “modest” decline in like-for-like sales as a result of decreased footfall in November.
Bason, however, defended Primark’s decision to not discount over Black Friday and Christmas: “The Primark strategy is to offer everyday low prices, rather than discounting twice a year. Black Friday and Cyber Monday mean those on limited budgets will more likely spend out of category, but at Primark we always have the price advantage of our value to bring in customers.”
Operating profit margin increased for the period, driven by an “increased emphasis on merchandising”: “It’s the strengthening in merchandising that has really paid off, with a real focus on key-line buying. Our fashions have really been on the money and we’ve got a great set of buyers.”
Bason said the underlying reason for Primark’s continued growth was the focus on the store environment: “Whereas some of the big retailers have been struggling with cash and haven’t invested in stores, we have a constant rolling programme to make sure that the estate is up to date. We all know what a store is like when it’s on the way down, that kind of drab, tatty look – that is not Primark.”