Black Friday hits Primark sales

PRIMARK warned that sales are on the slide after the High Street suffered what was described as the worst November on record.

The budget retailer’s owner Associated British Foods said it expects to report a 2pc drop in same-store sales for the 24 weeks to March 2.

Finance director John Bason said Primark was hit by the Black Friday weekend at the end of November when customers spent less on clothing as they were distracted by big discounts on products such as televisions and tablet computers.

Primark does not have a shopping website and did not take part in the Black Friday sales.

The firm also blamed a slowdown in spending in Germany for weighing on sales.

But UK sales have come ‘roaring back’ since November, Bason added, with the retailer enjoying a record Christmas.

Kate Ormrod, lead analyst at Global Data, said: ‘Primark possesses a winning formula of low prices and fast fashion affording it strong brand appeal.

‘However, given that it cannot rely on online operations to act as a crutch, as many other players continue to do, Primark must drive loyalty and basket sizes in a bid to reverse its like-for-like sales decline.’

In addition to Primark, ABF also owns major sugar, agriculture and ingredients businesses.

Lower sugar prices in the EU are expected to drag on ABF’s sugar sales but it expects the division’s performance to then start improving in 2020.

In its grocery arm, which houses the Jordans, Ryvita and Twinings Ovaltine brands, ABF is preparing for a rise in revenues.

However, profits for the division are expected to come in flat due to a £12m one-off cost relating to the move of its Twinings and Ovaltine production from China to Poland.

Bason added that uncertainty over the UK’s departure from the EU could impact how the business’s exported grocery products are treated when arriving from the UK post-Brexit.

‘The consequences of getting this wrong for people are major and I want people to understand that,’ Bason said, adding a hard Brexit would be ‘irresponsible’.

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