Demand for swimsuits and striped clothing during the heatwave has helped Primark increase sales at its UK shops, bucking the gloom on the high street.
Associated British Foods, owner of the cut-price chain, said profits were likely to be higher than as expected as it did not need to discount as heavily as feared. Sales rose 6% in the 40 weeks to 23 June.
“April was tough but then May and June have been really good for us,” said ABF’s finance director, John Bason. “Our footfall is going up.”
Analysts said Primark was taking share from the likes of New Look and Matalan as sales at established stores rose 1% in a flat fashion market.
The retailer’s performance comes despite growing worries for the high street after a string of established names announced plans to close dozens of stores. The rise of online shopping and slowdown in consumer spending have combined with higher costs to put the squeeze on many businesses.
“It’s too simplistic to say online’s gain is bricks and mortar’s loss,” Bason said. “Consumers are aware they have got more choice than they have ever had so your proposition has got to be distinctive.
“Online or offline, Primark has got the lowest prices around. We have got stuff people want to buy and in weather [like this] they want to be outside buying it.”
While Primark does not sell online, 12 million people follow the retailer on social media, enabling it to attract in-store traffic.
However, shares in ABF sank 4% on news that the company expected lower annual profits at its sugar business after disappointing prices in Europe. It said there was an excess of supply after high sugar production in the EU last year.
ABF expects to meet overall profit forecasts as the performance at Primark offset the decline in the sugar business.
