Primark: why its sales rose so strongly this festive season
After delivering a strong trading update for the latest quarter this week, Primark parent company ABF's finance chief has detailed just what made the company so strong in this key end-of-year shopping season.
John Bason said the company saw higher sales of high-heeled shoes and these are now back to the levels enjoyed pre-pandemic. And he added that the overall UK clothing market was up 5% in the period with consumers enjoying socialising despite the cost-of-living crisis, and also needing new clothes for the ongoing return to offices.
As well as heels, he said that loose-fit suits and knitwear added to the above-expectations Christmas period sales. Particularly important were sales of soft tailoring in bright colours, items that could be worn during the day and later for socialising.
Other categories that performed well included beachwear as consumers continued to book sunshine holidays, and cosmetics.
The company’s UK sales rose 15% in the four months to early January, even though prices had only risen by around 8%.
And underlining the importance of physical stores in the modern retail sector, Bason said that the company’s investments in its stores had paid off. He said Primark attracted plenty of physical shoppers who were looking to save money not just because of the budget prices at the chain but because shopping physically means they wouldn't have to pay for home delivery and returns.
He added that the decision not to increase prices further than already planned had been the right one, even though it dented profits. The company "stood by the consumer”, he explained, and clearly, the consumer paid it back by spending more.
It’s interesting that the finance chief also thinks online as a channel is becoming mature, which means the spectacular growth seen in the past is unlikely to be repeated. He told Retail Week that “people like being in our stores. We’ve got to move on from that narrative that online just increases all the time. To me, online looks mature”.
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