BUDGET fashion chain Primark put rival Marks & Spencer in the shade yesterday with bumper sales over the summer as shoppers flocked to its stores.
The chain, which has 158 of its 244 stores in the UK including 12 in Yorkshire, said operating profits rose 15 per cent to £356m in the year to September 15.
Primark’s like-for-like sales were three per cent higher, with UK trading “particularly strong” over the summer and Europe still buoyant despite tough economic conditions in Ireland, Spain and Portugal.
The chain’s parent company Associated British Foods said it will continue to expand Primark across Europe, defying weak consumer sentiment.
ABF’s chief executive George Weston said the group’s pace of expansion in countries such as Spain, where it has built 16 new stores in the past 15 months, will remain high.
The group’s new flagship store in Berlin posted record first-day sales, beating the record crowds at the 2007 opening of its first outlet on London’s Oxford Street. ABF, the owner of British Sugar and household brands Kingsmill, Ryvita and Twinings, said group operating profits topped the £1bn mark for the first time, up 17 per cent at £1.08bn. Group pre-tax profits rose 17 per cent to £974m.
“These are very good results for the group and include exceptional performances from AB Sugar and Primark,” said Mr Weston.
ABF said Jordans and Ryvita performed strongly in the UK thanks to new advertising campaigns.
Silver Spoon came under pressure towards the end of the year from increased competition, with growing demand for caster and icing sugar in home baking offset by a decline in granulated and brown sugar.
The market remained competitive for Allied Bakeries as promotional activity on its Kingsmill range hit margins.
The recent increase in wheat costs is set to increase the pressure going forward.
Sugar profits rose 62 per cent to £510m, helped by higher production and firmer prices in the UK.
Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: “The group has delivered earnings at the upper end of expectations.
“As expected, Primark and the group’s sugar business have again led the way.
“Primark continues to appeal to cost conscious consumers both here and in Europe, whilst increased production has played its part for the sugar business.
“Importantly, accompanying management outlook comments have proved reassuring.”