Following today’s release of the Primark’s figures for the 16 weeks to 6 January 2024; Louise Deglise-Favre, apparel snalyst at GlobalData, a leading data and analytics company, offers her view: “On the surface, Primark achieved a respectable 7.3% sales growth for the 16 weeks to January 6th 2024, however, this was mainly driven by store expansion, with like-for-like (l-f-l) sales growth significantly slowing to just 2.1%, from 7% in H2 FY2022/23. Though this is partly due to a wider slowdown in consumer spend towards the end of the year, as the lasting impact of inflation in the UK and Western Europe started to take a greater toll on discretionary budgets, it is somewhat worrying, given that Primark should have benefitted from shoppers trading down. 2024 is likely to remain a challenging year for consumers’ finances, so Primark should ensure it markets itself effectively to remain at the forefront of their minds for apparel purchases, especially in some of its international markets where brand awareness is still building.
“In the UK, total sales rose 4.5%, with l-f-l’s up 3.8%, with sales dampened by the exceptionally warm weather at the beginning of the season. In the rest of Europe, store openings in France, Spain and Poland allowed total sales to rise 8.1%, however, l-f-l sales increased a mere 1.3%. This was a drastic slowdown from the 8% l-f-l growth in FY2022/23, which may be due to its competition within the value market being strong due to well-established players such as Kiabi in France and New Yorker in Germany. Primark should continue to collaborate with European celebrities, such as Paula Echeverria in Spain to ensure it appeals to local consumers. In the US, sales rose 45%, though this will mainly be the result of its aggressive expansion strategy in the region, with no l-f-l figures given, indicating that trading was a challenge in this highly competitive market, especially due to the tremendous success of Shein.
“Primark did not give any update concerning the progress of its click and collect trial, which it first introduced in for childrenswear in late 2023 and later expanded to selected womenswear products and to 57 UK stores in September 2023. While the slow pace of the rollout allows Primark not to be overwhelmed by the complex logistics of the service, it could also be frustrating for consumers who would love to be able to benefit from its convenience across Primark’s entire product offering.
“In September 2023, Primark embarked on a multi-season collaboration with British singer Rita Ora, which has been well-received by consumers. Rita Ora also wore a bespoke Primark dress to the British Fashion Awards in December 2023, boosting its image by appearing alongside luxury designer brands at one of Britain’s most prestigious fashion events.”
