High street fashion giant Primark has made a major announcement regarding its prices amidst the current soaring cost of living crisis.
The budget retailer's owners have confirmed that it will not be increasing its prices between now and next autumn, despite the company facing rising costs.
Associated British Foods (ABF), Primark's parent company, has announced that it will be holding its prices for the new financial year to remind cash-strapped shoppers they are still a cheap alternative to other high street retailers.
As a result, the fast fashion chain has confirmed that customers will not see any further price rises across the companies ranges in stores, except for those that have already been put in place.
The announcement comes after Primark announced earlier this year that it would be increasing their prices this autumn due to the rising costs of inflation and raw materials.
Chief executive George Weston said: “Primark has faced significant input cost inflation and sharply moving currency exchange rates.
"We have decided to hold prices for the new financial year at the levels already implemented and planned, and to stand by our customers, rather than set pricing against these highly volatile input costs and exchange rates."
ABF has said that the new price move is "in the best interests of Primark" and that it will support its “everyday affordability and price leadership” and help it grow market share.
Mr Weston added: "Sales, margin and profits at Primark increased significantly as more normal customer behaviour resumed after the pandemic.
Significant progress was made in building out Primark's digital capability, which will be a key element in the future development of Primark."
The announcement comes just as Primark's like-for-like sales have returned to pre-Covid levels, despite remaining weaker in continental Europe. During the first Covid lockdown, the high-street retailer saw a loss of nearly £1 billion as it does not offer an online shopping option for customers.
Since then, Primark have announced a few changes to their shopping model, including trialling a Click + Collect service at 25 stores across the UK and relaunching an up to date website.
AB Foods has said that, despite rising costs, it has been a good year for the company, as revenue jumped by more than a fifth to £17 billion in the year to September 17, as pre-tax profit increased by nearly half to £1.1 billion.
The food business is expected to grow sales significantly this year as it hikes prices for customers, and AB Foods will also bring in some extra cash from the already planned price rises at Primark.
But adjusted operating profit is expected to fall as the business faces cost increases.
It announced an 8% increase in dividends to 43.7p per share, and promised to buy back £500 million in shares from investors.
Richard Lim, boss of the Retail Economics consultancy, said: "These are impressive results against the harsh economic backdrop.
The retailer is well-positioned to benefit from consumers who are trading down and putting lower costs at the heart of their buying decisions.
Many shoppers are prepared to sacrifice perceived quality and the convenience of online delivery for lower costs and it's driving people back into stores across parts of the sector.
However, there's a perfect storm of cost pressures facing the retailer from spiralling input and operating costs and the impact of a weaker pound and rising interest rates."
Don't miss the latest news from around Scotland and beyond. Sign up to our daily newsletter here.
READ NEXT:
