Primark to raise prices amid inflation as pandemic recovery continues

Primark owner Associated British Foods (ABF) revealed Tuesday that the fast fashion retailer continues to recover from the pandemic, but warned it will raise prices to offset inflation pressure.

In the 24 weeks to March 5, Primark sales came in at 3.54 billion pounds, a 59 percent increase from a year ago and just 4.6 percent below pre-Covid 2019 levels.

Meanwhile, its adjusted operating profit soared to 414 million pounds from 43 million pounds a year earlier.

Primark was hit hard during the pandemic as it was forced to close its store network during multiple lockdowns. Unlike its top rivals, it didn’t have online channels to offset those losses.

Road to recovery

But the retailer said Tuesday that sales continue to recover as economies have reopened, and it now expects sales in the second half to be ahead of the pre-Covid levels in the second half of 2019.

In the UK and Ireland, the retailer said it saw strong sales recovery in the first half with increased holiday travel and socialising, while in the US trading was also strong.

However, it said consumer footfall remained weak in Continental Europe.

The group’s half year sales and operating profit returned to pre-Covid levels.

ABF chief executive George Weston warned that Primark will implement “selective price increases” across some of its autumn/winter stock to offset inflationary pressures.

Weston said: “Notwithstanding the inflationary pressures we are experiencing, our outlook for the year is for significant progress in adjusted operating profit and adjusted earnings per share for the group.”