Primark sees sales rebound after lockdown

Associated British Foods said sales since reopening would hit £2bn by the end of the year.

Retailer Primark has seen sales rebound since lockdown in an encouraging sign for the UK High Street.

The owner of Primark, Associated British Foods, said that sales at the retailer had beaten expectations over the past quarter after reopening its stores.

ABF told investors that Primark’s performance had been “reassuring and encouraging” since stores welcomed customers again in June.

In a pre-close trading update for the financial year to September 12, ABF said: “Since reopening Primark stores we have seen increasing numbers of transactions driven by footfall.

“The average basket size was initially significantly higher than last year, reflecting some pent-up demand, and while this out-performance has reduced in recent weeks it remains higher than a year ago.

“We have continued our policy of offering the best prices, and markdowns for the period since reopening have been low.”

ABF has pencilled in profits at Primark to come in at about £350 million, still well down on last year when the company recorded a £913 million profit.

The company added that sales since reopening would hit £2 billion by the end of the year, however, that would be 12% lower on a like-for-like basis than in 2019.

The wider company also saw trading in its food divisions improve over the fourth quarter. The firm expects sales to be ahead of last year, driven by a strong performance from its tea business Twinings.

ABF said: “Twinings made good progress this year with volume growth in black tea and infusions in each of its major markets.”

Nevertheless ABF warned that the company has prepared for potential disruption in the months ahead, in particular Brexit.

The company added: “Our businesses have completed all practical preparations should the UK exit the Brexit transition period with or without a trade deal. Primark operates largely discrete supply chains for its stores in each of the UK, US and Europe and the group’s food production is largely aligned with the end market.

“As a result there is relatively little group cross-border trading between the UK and the EU. Contingency plans are in place should some of our businesses experience disruption.”