Weak UK sales pull Primark down despite international growth
Lower sales in the UK and Ireland pulled Primark’s performance down in the last quarter of 2024 despite double-digit growth in countries like Spain, Portugal and the US.
Primark’s parent company ABF Foods told markets this morning that sales in the UK and Ireland, which account for approximately 45 per cent of its market, declined four per cent in the 16 weeks to 4 January.
The retailer attributed the decline to weaker cold-weather and seasonal clothing sales and cautious consumer sentiment.
Shops across the UK have been warning that poor consumer sentiment about the economy discouraged spending in the last quarter of 2024.
Sales in the UK grew just 0.3 per cent overall in the ‘golden quarter’, which includes Black Friday, Cyber Monday and Christmas, according to the British Retail Consortium (BRC).
The BRC has predicted sales growth will average 1.2 per cent in 2025, although this is below the projected shop price inflation of 1.8 per cent.
Overall like-for-like sales at Primark fell 1.9 per cent, reflecting lower sales in the UK and Ireland despite expansion in mainland Europe and the US.
Sales in France and Italy grew 16 per cent, while sales in central and eastern Europe grew 22 per cent, ABF said.
Sales in Spain and Portugal were up nine per cent, but Spanish trading was affected by significant flooding in Valencia, which led to store disruption, with one store still closed.
In the US, sales grew 17 per cent. ABF opened two new US stores in the four months, taking its total to 29 stores.
Jeffries analysts said that despite the softening in domestic sales, the fact that guidance has held will create a “relief rally”.
However, analysts warned that “ongoing uncertainties surrounding Primark’s profit potential are not conducive to a sustained rebound”.
The company said it “remained confident” in Primark “despite the market conditions in the UK and Ireland”.
Elsewhere in the business, grocery revenue grew one per cent, driven by growth in international businesses Twinings and Ovaltine, while sugar sales declined two per cent and agriculture sales fell four per cent.