M&S looks to promotions to maintain share

The owner of budget clothing retailer Primark has said it would continue to open new stores despite reporting a slide in full-year profits.

Associated British Foods (ABF) said Primark’s underlying profits fell eight per cent to £309m in the year to September 17 as it “absorbed” some of its cost hikes, including the higher rate of VAT and a near doubling in cotton prices. Like-for-like sales rose three per cent in the year as its strategy of focusing on value and putting on more promotions helped drive sales.

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But while Primark’s markets remain tough, particularly in the UK, it said there are “exciting” opportunities to open new outlets and expand stores in all of the countries in which it trades, including Ireland, Spain, the Netherlands and Germany.

Primark has doubled its store numbers over the past decade and now has 223, having opened 19 over the past year. It opened 11 in the UK, bringing its total to 154. A new store will open in Edinburgh before Christmas and a second store is planned for London’s Oxford Street.