Primark UK sales slow amid 'continued consumer caution'

Primark owner Associated British Foods (ABF) has reported a 2% decline in revenue to £9.5 billion for the 24 weeks ending 1 March 2025, as continued consumer caution hit the retailer's UK sales. 

Sales grew 1% at Primark, driven by its "strong" customer value proposition and the execution of its store rollout programme.

Key markets such as the US, Spain, Portugal, France, Italy, and Central and Eastern Europe, delivered "good" growth. However, sales declined 4% in the UK and Ireland, despite achieving like-for-like sales growth during the Christmas trading period.

The decline in the UK and Ireland reflects cautious consumer sentiment and "a lack of seasonal purchasing catalyst in the autumn months", largely due to unseasonably mild weather.

Despite the softer performance, the retailer's click & collect service continued to gain momentum, increasing customer awareness and expanding access to a wider range of products.

The service is now available in 158 stores and is on track to roll out across all 187 of its UK locations by the end of June 2025.

Primark also reported a sales uplift from "active management" of its UK store estate, including store relocations, extensions, new store openings and an ongoing store refurbishment programme.

Looking ahead, Associated British Foods continues to target low-single digit annual sales growth for Primark, supported by the ongoing expansion of its store network in Europe and the US, though partially offset by weaker sales in the UK and Ireland.

The company noted "early signs of improvement" at Primark in the UK and Ireland in recent weeks. It remains focused on driving underlying growth across all markets by enhancing its value proposition through initiatives in product, digital and brand.

Primark also emphasised that it is not raising prices for UK shoppers as it pledged to swallow sharp increases in labour costs.

George Weston, CEO of Associated British Foods, said it is witnessing "significant" rises in labour costs after increases to NI contributions and wage rises but plans to keep prices flat.

"We went nine years without moving prices before inflation forced us to change pricing a couple of years ago. We haven’t moved any more prices and are absolutely not planning to move any more. Hopefully we can keep them flat for another eight or nine years.

"There has been some benefit from weakness in the US dollar and benign cotton costs, but there are labour cost rises which we are choosing to absorb."

Weston added that the business in the UK has held off competition from Asia-based rivals including Shein and Temu.

However, he welcomed the Government’s review of a tax rule that allows small parcels to enter the UK duty-free, which has been used by the overseas online retailers.

The billionaire businessman said the rule, which means international packages worth less than £135 can be sent without import taxes, was "wrong" and created an unfair advantage.