Robyn Duffy, Consumer Markets Senior Analyst at RSM UK, comments on Associated British Foods’ full-year results for Primark:

“Amid slowing sales at Primark, ABF is reviewing its group structure. A separation of Primark from the food division could enable a more agile, retail-focused strategy. This would support faster store rollouts, deeper supply-chain investment and greater digital innovation without being constrained by the group’s broader diversification priorities. A standalone Primark would also provide clearer visibility on margins, returns and sales performance, offering investors sharper insight into the dynamics of the fast-fashion market. For both sides of the business, the move could unlock a sharper strategic focus within their respective sectors.

“Primark’s core customers are feeling the pinch more than most. With household budgets still under strain and employers scaling back hiring, following April’s increases to employment costs, many lower-income consumers have less disposable income to spend. That’s now feeding through to a slowdown in UK sales as shoppers tighten their belts once again.

“Primark is struggling to compete with operators in the centre of the market with effective omnichannel models, such as Next, Zara and M&S. These brands continue to resonate with consumers and are outperforming the likes of Primark with a store focused model, and purely online retailers such as ASOS, as they can’t offer UK consumers everything that they need - value, convenience and experience. A separate entity might give Primark the autonomy it needs to explore an enhanced digital proposition, benefitting the business in the long-term.

“By contrast, Primark’s expanding US presence continues to offer real promise. But tariff risks remain the key watchpoint. While the drag has yet to fully materialise - cushioned by delayed inventories, cautious pricing and gradual supply chain adjustments - the real impact on margins is likely to emerge more clearly through 2026.”

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