Primark outshines rivals with a buoyant summer

PRIMARK says middle class shoppers are increasingly converting to its cut price fashions as Government austerity measures cut deeper.

The retail group, which is owned by Associated British Foods, is one of the few chains on the high street to emerge unscathed from the wet summer and the distractions of the Olympics.

Finance director John Bason said underlying sales are expected to rise 3pc for the year as Primark’s appeal widened to a broader cross section of customers.

‘Word is spreading wider to more people,’ he said. ‘Primark’s offering is being recognised by a higher number of people as more UK consumers find themselves being careful about how they spend their cash.

‘We have seen more people who have not been into a Primark before and it is clear more and more people have become converts.’

The retailer is expected to see total sales rise by 17pc, over its current financial year, which ends on Saturday.

In an upbeat trading statement – at odds with the dismal updates from its rivals – the firm said: ‘Trading this summer in the UK was particularly strong and sales in continental Europe remained buoyant.’

It ‘ powered through the Olympics’ with its formula of cheap chic – chinos sells for £10 and jumpers £12 – as rivals blamed rain and the Games from keeping their shoppers off the high street.

However, its flagship Oxford Street store in London saw some slowdown in the two weeks of the Olympics, but other regional stores compensated for this and Oxford Street soon recovered.

Early sales of the autumn/ winter range have been encouraging. The firm which also makes Kingsmill, Ryvita, Twinings, and Silver Spoon, said profits at its sugar business for the year would reach record levels due to short supply resulting in a big jump in fullyear earnings.

However, in China prices have continued to fall since the half year and revenues will be lower as a result. Profits as Kingsmill have also come under pressure due to fierce competition and heavy promotions and deals in bread. The shares fell 28p to 1278p. Darren Shirley, an analyst at broker Shore Capital, said: ‘The continuing strength of ABF performance in an increasingly challenging consumer environment further demonstrates that Primark is possibly the most potent retail format in the UK and increasingly Europe.’