Primark store expansion plan offsets sales slump
Primark is expected to report sales growth in its full-year results driven by the bargain retailer’s store expansion plan.
Sales for the full-year, which will be announced in November, are expected to be four per cent up on last year, the retailer’s owner Associated British Foods (ABF) said in a trading update this morning.
The expansion of its international store portfolio has offset a two per cent dip in like-for-like sales.
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In the UK, sales growth of three per cent was driven by new selling space including the retailer’s new “megastore” in Birmingham.
However, like-for-like sales slumped one per cent as the business battled challenging market conditions on the high street.
The retailer opened 14 new stores in the year, in the UK, Germany, Spain, France, Belgium, the Netherlands and Slovinia, bringing its total estate to 373 shops.
The retail giant is continuing to expand in the US following a year of strong sales growth, with its tenth US store in New Jersey set to open this autumn followed by a Florida branch in 2020. The company has also exchanged contracts on a Chicago store.
Eurozone sales are expected to be five per cent ahead of last year, driven by strong performance in Spain, France, Italy and Belgium.
Weak sales in Germany saw like-for-like sales in Europe fall three per cent.
Over the next financial year the business plans to add 1m sq ft of additional selling space.
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Interactive Investor head of markets Richard Hunter said: “Primark will open its tenth US store in the autumn, with further openings planned. The growth of the US business is also described as strong, which should significantly reduce the operating loss as the business begins to gain traction.
“In the meantime, Primark as a whole is underpinned by a reasonable UK performance, with sales adding four per cent accompanied by an improved fourth quarter and a five per cent improvement in Eurozone sales, where the only blot on the landscape is in the economically troubled area of Germany.”
Main image credit: Primark