Primark hails record Christmas week as consumer spending proves more resilient than expected

Primark owner Associated British Foods (ABF) has reported a jump in sales after consumer spending proved to be more resilient than it expected.

Group revenues rose by 16 per cent at constant currency rates over the four months to January 7, to £6.7 billion from £5.57bn a year earlier. There were record sales at discount fashion chain Primark in the week leading up to Christmas Day, marking a much stronger festive period than the retailer was anticipating. Sales in the UK were up by 15 per cent over the four-month period and the chain’s share of the clothing, footwear and accessories market jumped to 7 per cent from 6.5 per cent last year.

Visitor numbers to stores were strong in major cities as well as on high streets and retail parks, ABF said. It also enjoyed a surge in online visitors since improving its website.

Adam Vettese, an analyst at social investing network eToro, noted: “Associated British Foods’ Christmas trading update is encouraging. With no reprieve in sight for household finances, ABF’s budget fashion chain, Primark, which accounts for nearly 47 per cent of group revenue, should also benefit in the coming months from shoppers trading down from more expensive clothing outlets.”

The group’s food business, which includes brands British Sugar, Twinings and Ovaltine, also saw a sales boost but the firm said this was largely achieved by increasing prices to recover significant cost inflation. It still faces substantial cost pressures but inflation has become less volatile and some commodity costs have recently declined, ABF told investors.