Christmas sales break records at Primark as shoppers defy economic gloom to afford new clothes
Primark toasted record Christmas sales by saying the cost of living crisis had a less dramatic impact on demand for new clothes than expected.
In an upbeat trading statement, the budget channel said revenue hit £3.15billion in the 16 weeks to January 7, up 15% on the same period last year.
Sales in the week before Christmas Day hit a record high as cheap prices lured shoppers to its stores.
Record sales: Primark, which worked with TV presenter Stacey Solomon (pictured), said revenue hit £3.15billion in the 16 weeks to January 7
John Bason, chief financial officer of Primark owner Associated British Foods, said that despite jitters over demand this winter, a “real drop in spending just hasn’t happened”.
He added: “I’m not remotely saying that some people don’t find it very difficult, we’re all in a rush but it hasn’t been as dramatic as we thought.”
The update cemented Primark as one of the High Street Christmas winners alongside rivals such as Marks & Spencer and Next. Online rivals Boohoo and Asos struggled, however, as shoppers flocked to the High Street.
Richard Hunter, Head of Markets at Interactive Investor, said: “Primark is back in full force given changing buying habits.
“As seen with so many other retailers, particularly over the Christmas period, there has been a marked return to physical shopping, to some extent at the expense of the higher online levels seen during the pandemic. “
A return to the office and Christmas celebrations saw sales of high heels jump at Primark – which has also collaborated with TV presenter Stacey Solomon (pictured) on a clothing range Evening wear sales jumped 176% year-on-year.
Shoppers opted for slightly fitted clothes, with women eschewing traditional black and navy blazers for hot pink and purple options.
Strong accessory sales were also proof that “people are ready, thank goodness, and having fun,” Bason said.
Cozy loungewear also did well, as customers sought to save on their energy bills by stocking up on comfy “snuddies” — a blanket with a hood and sleeves — and velor leggings.
While New Year’s trade has been “encouraging” so far, bosses admitted the economic outlook remained dire and “could weigh on consumer spending in the months ahead”.
Although Primark raised prices last summer, it had previously pledged to freeze them for this financial year, a move that “seems a good move”, Bason said.
The High Street retailer’s click and collect trial of children’s products across 25 stores has been warmly received, bosses said. Traffic to its UK website has jumped 85% since last year.
The retailer is committed to continuing its physical store rollout, with plans to open 17 locations in various international markets this fiscal year.
Primark has 416 stores worldwide. Online fashion retailers such as Asos and Boohoo have issued grim profit warnings in recent weeks as shoppers head to the High Street to avoid postal strikes.
Brick-and-mortar stalwarts such as Marks & Spencer and Next have seen bumper sales in recent trade updates, allaying fears that the High Street is having a dark Christmas.
ABF said the group’s total revenue reached £6.7bn in the 16 weeks to January 7, up 16% from a year earlier.
Shares fell 2%, or 37.5p, to 1,832p after it said profits at its British Sugar arm would be hit by bad weather hampering UK sugar yields.