Primark owner blames sales drop on ‘unseasonable’ weather


Primark sales rose four per cent above last year’s level for the year to date, owner Associated British Foods (ABF) said today.

However, like-for-like sales actually fell in the 40 weeks to 22 June, with the sales boost coming largely from new stores.

The retailer’s 160,000 square foot flagship store in Birmingham exceeded expectations, as did new stores in Bordeaux and Ljubljana.

ABF blamed “unseasonable” weather in May with shoppers needing to purchase items like a rain jacket for the drop in like-for-likes, telling investors that shopping picked up again in June.

Despite the fall, Primark also recorded a “further significant increase” in market share.

Trading at new stores has been strong, but Eurozone sales were also hit by the bad weather.

Spain, Portugal, France and Italy all saw sales rise but trading continued to be weak in Germany.

Primark’s US business experienced “encouraging like-for-like and strong total sales growth”, the firm added.

The budget clothes brand is set to generate “good profit growth” for the full year.

Meanwhile ABF told investors that revenue from its AB Sugar division stayed flat year on year in the third quarter, beating the decline in sales in the first half of the year.

However, it warned that low EU stock levels created by weak sugar production will remain an issue for 2019-20, expected to at least match last year’s 1.15m tonnes. This will underpin higher EU sugar prices.

ABF said grocery revenue rose one per cent over its third quarter, while ingredients revenue stood five per cent ahead of last year.

“We continue to take action to reduce the cost base at Allied Bakeries and have undertaken a detailed review of our network to optimise production capacity and locations, and routes to market,” ABF said.

“Last month we announced our proposal to relocate our bakery operations from Cardiff to our other facilities in the UK.”

Group revenue at ABF stood at two per cent higher than 2018 for the year so far, or three per cent in constant currency.

ABF said it will hit its full-year guidance.