The Scotsman

Big Pri­mark stores hit by tourism fall

● But over­all sales re­silient thanks to strong bouce back at retail park sites

- By SCOTT REID sreid@scots­man.com Business · Retail · Shopping · Consumer Goods · Travel · Industries · Primark Stores Limited · Edinburgh · United Kingdom · Hargreaves Lansdown · Associated British Foods · Faroe Islands

Pri­mark has seen its largest stores in ma­jor shop­ping des­ti­na­tions such as Ed­in­burgh hit by a “sig­nif­i­cant de­cline” in foot­fall amid lower num­bers of tourists and com­muters.

On the flip side, sales at the chain’s out-of-town stores in retail parks are higher than a year ago, after they re­opened fol­low­ing the eas­ing of lock­down restric­tions.

In a trad­ing up­date to in­vestors, par­ent com­pany As­so­ci­ated Bri­tish Foods (ABF) said sales at the high street gi­ant have beaten ex­pec­ta­tions over the past quar­ter after reopen­ing. Over­all, sales have been “re­as­sur­ing and en­cour­ag­ing” since the stores wel­comed cus­tomers back in June.

The con­sumer group said trad­ing in its fo o d di­vi­sions h a d a l s o b e e n b e t t e r t h a n pre­dicted so far in the fourth quar­ter, as it pro­vided a pre - close trad­ing up­date for the fi­nan­cial year to 12 Septem­ber.

It ex­pects to re­port around £2 bil­lion in Pri­mark rev­enues in the pe­riod be­tween reopen­ing its stores and the end of the year. Sales have been driven by larger cus­tomer bas­kets with trans­ac­tion sizes ini­tially “sig

nif­i­cantly high er” than last year due to “pent-up de­mand”.

A B F c h i e f f i n a n c e o f f i c - er John Bason said: “We are en­cour­aged that we’ve seen broadly-based progress, but I think the par­tic­u­larly strong take­away has been the power of the Pri­mark brand.

“H a v i n g b e e n c l o s e d f o r t h r e e m o n t h s o b v i o u s l y caused pres­sure, but all over the countr y we’ve seen sales ab ove what we were see­ing last year.

“We saw big bas­kets in June but re­cent sales haven’t been

due to pent-up de­mand and that’s re­ally en­cour­ag­ing. July was great and ‘back to school’ meant we saw a ter­rific end to Au­gust.”

The group said sales at stores in retail parks have been higher than last year, while shop­ping cen­tre and re­gional high street stores are broadly in line with their av­er­age.

How­ever, the largest stores in ma­jor shop­ping des­ti­na­tions have been hit by a sig­nif­i­cant slump in foot­fall amid lower num­bers of tourists.

In the UK, like-for-like sales since reopen­ing are ex­pected to be 12 per cent lower than the same pe­riod last year after be­ing weighed down by weaker per­for­mances at Pri­mark’s four largest stores.

ABF said ad­justed op­er­at­ing prof­its at the Pri­mark busi­ness are now ex­pected to be “at least at the top end” of its pre­vi­ous fore­casts of £300 mil­lion to £350m.

Ne il Wilson, chief mar­ket an­a­lyst for Mar­kets.com, said: “Is there a bet­ter guide to the health of the high street than Pri­mark? The cheap-as-chips cloth­ing jum­ble sale is about as good a barom­e­ter as any for what’s hap­pen­ing, with Next go­ing in­creas­ingly on­line and M&S not what it once was in cloth­ing and more of a gro­cer than ever.

“P r i m a r k a l s o d o e s n’t d o on­line so we get an un­mud­died view. S o, it’s good news that AB Foods re­ports Pri­mark sales have bounced back strongly since reopen­ing.”

Su­san­nah Streeter, se­nior in­vest­ment and mar­kets an­a­lyst at Har­g­reaves Lans­down, n o te d : “I t a p p e a r s P r i mark cus­tomers re­main re­mark­ably loyal, lured by the chain’s fash­ion credential­s and value of­fer­ing.

“Strong in store sales over the sum­mer, with­out the need to dis­count, has meant a sig­nif­i­cant pro­por­tion of ex­tra stock was also sold.”

“Hav­ing been closed for three months ob­vi­ously caused pres­sure, but all over the coun­try we’ve seen sales above what we were see­ing last year”

JOHN BASON, ABF

 ?? PIC­TURE: JANE BARLOW/PA ?? 0 The flag­ship Ed­in­burgh store saw queues form when it re­opened in June
PIC­TURE: JANE BARLOW/PA 0 The flag­ship Ed­in­burgh store saw queues form when it re­opened in June

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