Following today’s release of Primark’s figures for the 16 weeks ending 4 January 2025; Alice Price, apparel analyst at GlobalData, a leading data and analytics company, offers her view: “Primark has got off to a disappointing start in FY2024/25, with total revenue rising just 0.4% to £3.4bn in the 16 weeks ending 4 January 2025, while like-for-like (l-f-l) sales declined 1.9%. Its performance remained strong overseas, supported by store expansion in the US and Europe, as well as underlying growth in many markets, however it was dragged down by continued subdued demand in its largest market of the UK and Ireland. Despite improved demand in December, this was not enough to offset weaker sales during the Autumn, inhibited by milder weather in the UK. Womenswear was also a weak link, as females have more scope to cut back on their high purchase volumes during inflationary pressures and are increasingly turning towards resale. 2025 looks set to be another challenging year for retail, as consumers remain uncertain of the economic outlook, so Primark must drive home its value for money credentials alongside its affordability.
“In Primark’s home market, the UK and Ireland, revenue declined 4%, while l-f-l sales were down a stark 6.4%, as consumer confidence remains compromised as a result of stubborn inflation. Where Primark once reaped the benefits of shoppers trading down amid inflationary challenges, many are now switching to retailers with better value for money perceptions. Its performance in the region has also been impacted by the continued outperformance of the online channel, while instore footfall would have been dampened by stormy weather. Though Primark’s Click & Collect service was rolled out further to 113 stores during the period and is said to be performing well, the retailer is still missing out from its lack of home delivery service, and with online continuing to outperform within the UK apparel market for the next few years, this may become a long-term hindrance.
“Central and Eastern Europe and the US stood out as Primark’s best performing regions, experiencing revenue growth of 22% and 17% respectively, driven by new store openings. Primark also cited respectable growth in Spain and Portugal, and France and Italy, growing 9% and 5% respectively, with store openings once again driving growth as well as good underlying growth. In Northern Europe, total sales grew 3% and l-f-ls grew 4.5%, though this was partly due to strike action in Germany in the prior year. Despite this more positive international performance, Primark cannot rely on store expansion to sustain long-term growth in these regions. It should consider rolling out its Click & Collect service to these markets, which would give it an advantage over store-only competitors in Europe like Kik and Pepco and allow it to better rival multichannel behemoths like Target and Walmart in the US.”
