Primark experienced a decline in sales in the UK, according to its parent company, Associated British Foods (ABF). For the year ending in September, like-for-like sales fell by 3.1% compared to the previous year. This decrease is attributed to weak consumer confidence, leading to reduced spending in stores. ABF has indicated that it anticipates a continued impact on Primark sales through 2026 due to a “subdued” retail market.
ABF, which also owns food brands such as Twinings, Ovaltine, and Ryvita, reported an overall profit drop of 13%, totaling £1.4 billion for the year. The company is considering separating Primark from its food brands, although no final decision has been made.
The CEO of ABF, George Weston, expressed a cautious optimism for the year 2026, noting that this outlook hinges on the “consumer environment,” which remains unpredictable. Increased costs due to rising inflation have led consumers to spend less on non-essential items such as fashion, while some have opted for cheaper alternatives from competitors.
Inflation was reported at 3.8% for the year to September, remaining above the Bank of England’s target benchmark of 2%. M&G Investments fund manager Randeep Somel commented that the decline in Primark’s sales indicates consumers are hesitant to spend, awaiting a review of the national budget.
This situation is amid a broader trend of challenges faced by retailers on the UK high street, with many businesses struggling to maintain physical stores due to rising operational costs and increasing competition from online retailers. Notable recent closures include Bodycare, Claire’s, and an announced reduction of locations for Pizza Hut.
Source: https://www.bbc.com/news/articles/cj0enr1ez46o?at_medium=RSS&at_campaign=rss