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Price still king, says Primark’s finance boss

Primark’s pricing strategy and being the “best value on the high street” were key to the retailer’s success over Christmas, says parent company Associated British Food’s (ABF) financial director, John Bason.

Sales at Primark rose by 7% during the 16 weeks ending 6 January 2018, and ABF reports the UK as “performing well” with “strong” like-for-like sales, despite difficult trading for many of its competitors over the festive season.

“The price point is key,” said Bason. “Everybody gets that we’re the best value on high street. Frankly we guard our price position in the market. Despite the drop in the value of the pound, we didn’t put prices up in the UK, which was a big deal. We’ve got a very loyal following.”

Bason also pointed to the retailer’s use of digital avenues to drive sales, despite not selling products online.

“There is talk of fact that we don’t have a transactional website but we are very good at driving purchase decisions from people looking at digital stuff. Not many years ago people went into stores not sure what they would find and if they found something they like they bought it. Increasingly they are using their smartphones to research on social media [and we’re tapping into that].”

For 2018 Bason is optimistic that UK trade will be strong, but warned the business is facing tough comparisons from a late, warm Easter last spring.

“I’ve had the privilege of watching Primark over 18 years. I’ve seen them do well in good and bad economic times. They have what people want at prices they want, and they are communicating it in a relevant way. Footfall has gone up as a result.

“The UK business has got real momentum and I think that will continue. But we are up against some very strong comps so it will certainly be more difficult for us we go into second half of year. That’s not a cautionary note, but a statement that this business is continuing to build but probably not quite at the same rate.”

 

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