Following today’s release of Primark’s figures for the 16 weeks to 7 January 2023; Louise Deglise-Favre, Apparel Analyst at GlobalData, a leading data and analytics company, offers her view: “Primark has reported a constant currency sales growth of 15% for the 16 weeks to 7 January thanks to improved footfall in its key markets, as consumers splurged on their first COVID-free Christmas since 2019. In the UK, Primark registered a 15% sales increase which was “nearly all” like-for-like, benefiting from both the price increases it introduced in September 2022 and higher volumes as consumers were pushed to shop instore due to the postal strikes, and its low prices resonated amidst the cost of living crisis. Primark’s position as a value retailer will help it navigate 2023 as it will attract shoppers wishing to trade down to its wide ranges suitable for all ages and genders, and its desirable trend-led pieces.
“In Europe, Primark registered a 16% increase in sales, 8% on a like-for-like basis, which is encouraging given that the region performed relatively poorly in its FY2021/22, with sales remaining 16% below pre-pandemic levels. Performance in Europe was boosted by an increase in footfall, as well as its winter ranges resonating well with consumers. In the US, sales grew by 4%, which is slightly underwhelming given the region’s three store openings throughout the period. However, it was up against a strong period of trading in the lead-up to Christmas 2021 as consumers’ finances had been boosted by the numerous rounds of federal stimulus payments. Primark plans to continue its rapid expansion with the goal of doubling its selling space in the country by the end of FY2022/23, which while ambitious, could bring huge benefits as its value proposition blended with good fashion credentials has so far well resonated with American consumers.
“Primark stated that it remains committed to improving its online proposition, rolling out the improved website that it launched in the UK in 2022 to the US, Germany, and Spain in the coming months. While the new website is undoubtedly an improvement on its predecessor, consumers will still be disappointed that it is not transactional. Surprisingly, Primark also remained quite vague about the performance of the click & collect trial of childrenswear products it launched in 25 UK stores in November 2022, stating that it was “encouraged” by it but not disclosing any future expansion or cancellation plans. This lack of communication around the retailer’s first venture into online retail leaves room for speculation around its success and hopefully only means it is too early to determine if Primark will commit to offering the service permanently or not.”
