Primark has seen a surge in gross sales after costs went up and customers flocked to metropolis centres, in keeping with proprietor Related British Meals (ABF).
Gross sales on the worth trend retailer within the UK jumped by 15% within the six months to early March, in contrast with the identical interval a yr in the past.
Throughout Primark, which incorporates retailers in international locations round Europe, gross sales rose by almost a fifth to £4.2 billion, beating the group’s expectations for the interval.
Extra customers returned to excessive streets and retail parks, and enterprise boomed at metropolis centre shops amid a resurgence in workplace staff and vacationers, ABF mentioned.
Outlets additionally attracted new clients as individuals hunted down extra reasonably priced gadgets amid hovering dwelling prices, resulting in a rise within the quantity of gross sales. However common promoting costs went up because the enterprise tried to offset a number of the influence of price inflation.
ABF added that it’s “cautious concerning the resilience of client spending within the face of ongoing inflation in the price of dwelling and better rates of interest” so had chosen to place by solely “average” worth will increase for this monetary yr.
On account of the “cautious” pricing selections, increased promoting costs didn’t totally offset the influence of price inflation over the interval and the group’s margins declined.
The corporate, which additionally owns main grocery, sugar, and elements companies, noticed its adjusted revenue earlier than tax slip by 3% to £684 million.
It expects its full-year income to be broadly in keeping with the earlier monetary yr as gross sales development moderates and its prices go up, similar to for increased employees wages.
George Weston, CEO of Related British Meals, mentioned: “This era was marked by excessive and risky inflation in all our companies. Now we have taken appreciable motion to mitigate these prices by operational price financial savings and, the place applicable, pricing.
“We had been more than happy with the advance in Primark gross sales, which recovered strongly from the second half of the final monetary yr and drove working revenue margin as much as 8.3%, increased than we had anticipated.
“Primark has been very profitable on this interval in attracting new clients with its proposition of excellent high quality merchandise mixed with worth management and nicely invested shops. Now we have had a really robust contribution from new shops opened within the interval, and right this moment we’re saying plans for the event of our Primark enterprise in southern states of the US.”