07 November 2023
Primark owner, Associated British Food, revealed this morning the clothing and accessories retailer saw like-for-like sales growth of 9% in FY23 resulting in revenue of £9b, and adjusted operating profit which was 3% lower at £735m with margins of 8.2% reflecting decisions on pricing.
Results were driven by limited and carefully selected price increases which helped the business offset high levels of input cost inflation. They were also assisted by strong performance from new store openings in the year taking them to over 430 stores from 408 last year, and demand for its ranges.
Robyn Duffy, Senior Analyst for Consumer Markets at RSM UK commented: ‘Primark’s results speak to their unique place in the market and its ability to navigate inflationary pressures which peaked early in the financial year and which characterised the trading period of these results. By selectively implementing price increases across certain ranges, the business has avoided alienating their core audience who go to the brand looking for value, whilst also allowing the business to conserve margin.
‘Cost-of-living pressures have created a greater emphasis on value for Primark’s customers, leaving the business well placed to meet heightened demand across both its own audience and a broader base of consumers eager to trade down to better value options.
‘In terms of digital transformation, the brand continues to explore it’s ‘click and collect’ model; most recently expanding operations to womenswear. The business is now benefitting from this increased instore footfall. It’s stayed true to its core and closely aligned its digital expansion to its stores. Again, indicating that despite a shift into digital exploration, stores will be the primary driver for Primark’s sales performance going forwards.’