Primark has reported a sharp rebound in sales as shoppers returned to high streets following the easing of Covid-19 restrictions. The fast-fashion chain recorded revenues of £1.6bn for its third quarter, up more than 200% – or £1bn – compared with the same period last year, and ahead of expectations.
Owner Associated British Foods (ABF) said the retailer set a number of sales records, with overall sales 3% ahead of the same period two years ago, before the pandemic. The company attributed the surge to pent-up demand, higher customer footfall, larger basket sizes and a lower level of price markdowns. ABF shares rose almost 5% on Thursday morning, making Primark's parent the top riser on the FTSE 100.
More than half of Primark's stores broke sales records this year, aided by extended opening hours. The retailer, which does not trade online, returned £72m in furlough payments to the UK government. ABF said financial support from job retention schemes in the UK and Europe helped preserve all 65,000 jobs globally, despite the company taking a £3bn hit to sales and losing £1bn of profits in 2020.
ABF now expects Primark's full-year earnings to be broadly in line with the 2019-20 financial year, after previously warning that profits could fall somewhat lower. Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said the chain's success would make it "even more unlikely to reverse its decision not to launch a digital sales platform".
Streeter added that Primark may look like "a bricks-and-mortar island fighting off an encroaching online tide", but it has shown that a strong social media presence can still attract queues of shoppers. The company has continued with its store-opening programme, launching seven new shops worldwide in the third quarter.
