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Primark invests in Christmas to weather Black Friday

Primark is bolstering its Christmas gifting offer to drive footfall over Black Friday on 29 November, John Bason, chief financial officer at parent company Associated British Foods, has told Drapers.

The value retailer does not participate in Black Friday, and so has increased its Christmas gifting to pull in shoppers during the discounting period.

“We have a much better range of Christmas gifts that will be going into store from now, with a bigger emphasis than we’ve had in previous years,” said Bason.

“We don’t participate in Black Friday per se, but the Christmas gifting is a useful tool to get people in store.”

Key items include licensed Disney gifts, partywear and Christmas jumpers.

Bason said: “UK sales were very nicely up in October”, but anticipated the annual pressure from online Black Friday deals in November.

The retailer defied a difficult market to report revenue growth of 4.2% to £7.8bn for the year to 14 September, driven by its ongoing store expansion.

Despite a 1% dip in UK like-for-like sales, total sales grew 2.5% and Primark said the performance of its clothing, footwear and accessories categories continued to outperform its competitors – including those online.

Primark opened 14 stores in the year, including its Birmingham High Street juggernaut – the biggest retail store in the world, as decreed by Guinness World Records. It has 19 further openings and relocations planned for the coming financial year, focusing on the US, and southern and eastern Europe.

With “relatively little cross-border trading”, Bason was confident Primark is in “good stead” to weather Brexit, although he did note that a pre-Christmas election was “not the best timing”.

It was reported in July that Primark was seeking 30% rent cuts on dozens of stores to level the playing field with high street rivals using company voluntary arrangements to cut costs.

“What the number of CVAs has indicated is that the pricing of retail has changed,” said Bason. “The market has moved such that you can get space at lower prices than you could previously, therefore Primark will use lease events to negotiate the best terms going.”

 

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