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Strategic price increases drive Primark's growth

By Don-Alvin Adegeest


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Primark Store Credits: Primark

Primark's sales growth in FY23, posted by owner Associated British Food this week, highlights strategic measures that propelled the clothing retailer's success. Like-for-like sales surged by 9 percent, generating 9 billion pounds in revenue. Adjusted operating profit, slightly lower at 735 million pounds with an 8.2 percent margin, reflects deliberate pricing decisions.

Strategic price increases, thoughtfully applied to selected ranges, allowed Primark to counteract input cost inflation successfully. The results were further bolstered by the positive reception of new store openings, increasing the total store count to over 430 from the previous year's 408, and robust demand for its product offerings.

Robyn Duffy, Senior Analyst for Consumer Markets at RSM UK, commended Primark's adept handling of inflationary challenges. The strategic implementation of price adjustments managed to preserve the brand's appeal to its core audience seeking value while safeguarding profit margins.

With cost-of-living pressures influencing consumer behavior, Primark's emphasis on value positioned it favorably to meet heightened demand. The brand effectively caters to both its existing audience and a broader consumer base seeking cost-effective alternatives.

In terms of digital transformation, Primark continues to explore its 'click and collect' model, recently expanding it to womenswear. This strategic move aligns with the brand's commitment to blending digital expansion with its physical stores, emphasizing the enduring significance of in-store experiences. Despite digital exploration, Primark remains steadfast in recognizing that its stores will be the primary driver of future sales performance.