Primark vows to keep prices low depsite cost of living crisis

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At its first quarter trading update, Primark owner Associated British Foods said that sales for the 16 weeks to January 8 were 36 percent ahead of the same period last year, when the UK and Europe were in lockdown. Total Primark sales are running just five percent below pre-Covid levels.

Despite the increased costs it is dealing with due to ongoing supply chain disruption and soaring commodities prices, Primark says these have been mitigated by sterling gaining against the US dollar, as well as cuts to its store overheads and operating costs.

As a result, ABF finance director John Bason said that Primark will not follow the lead of Next, Marks & Spencer and Superdry who have signalled that their prices are likely to rise. “Primark prices for the consumer will remain where they are,” he said. “It’s locked and loaded.”

ABF is planning to cut hundreds of store management jobs, which it said will simplify its operations and make them more efficient. 

It is also set to launch an improved UK website in March. People will not be able to buy online, but they can use it to check stock levels at stores.

Although Primark customers will be spared inflationary price rises, those at ABF’s other businesses will not be so fortunate.

It said that while it hopes to offset higher production costs at its grocery division ‑ which owns the likes of Twinings and Silver Spoon ‑ and its sugar production, ingredients and agriculture units, with efficiency savings, it will “where necessary”, raise its prices.

Elsewhere, Superdry founder and chief executive Julian Dunkerton said his turnaround plan for the business is bearing fruit, after its margins climbed 3.5 points to 55.2 percent.

It made a statutory pre-tax profit of £4million for the first half, compared to a £18.9million loss the previous year.

Revenues for the six months to October 23 were down 1.9 percent to £277.2million versus the year before, which he said reflected its decision to scrap discounted sales.

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