Home Retail Primark To Near Double U.S. Stores Despite $2.3 Billion Inflation Hit

Primark To Near Double U.S. Stores Despite $2.3 Billion Inflation Hit

by Ozva Admin

The owner of Irish fast-fashion giant Primark expects to take a full $2.3 billion hit from inflation this year and next.

However, the group also plans to go ahead with expansion across the states and will open 10 more stores in the US in the year through September, in addition to the 13 stores already operating in North America.

Indeed, the US remains a buoyant market for Primark and total fourth-quarter sales should be around 27% above pre-COVID-19 levels, the company said, buoyed by new store openings. stores, with comp. sales close to pre-Covid levels.

However, parent company Associated British Foods (ABF) issued a stern warning during its annual results statement that a weak consumer environment in Europe and the UK would also pose big business challenges for the crucial Christmas season.

ABF said it had experienced what it described as the most challenging economic conditions for many years, with widespread and sharply rising inflation, with Prices rise at Primark by 8% this fall.

However, despite ongoing inflationary pressures, ABF promised it had no further plans to raise prices in the coming months at Primark as it sought to shield hard-pressed consumers from the worst of skyrocketing costs. The retailer did not increase the price of about half of the merchandise he sold, including children’s clothing.

Volatile conditions for Primark

George Weston, CEO of ABF, said: “Looking ahead, substantial and volatile input cost inflation will be the most significant challenge in the new fiscal year, and our companies will continue to seek to recover these higher costs from the most suitable way. Primark has faced significant input cost inflation and drastic changes in currency exchange rates.

“We have decided to keep prices for the new fiscal year at the levels already in place and planned and support our customers, rather than set prices against these highly volatile input costs and exchange rates.”

ABF’s revenue rose 22% to $19.7 billion in the year to September 17, while pre-tax profit rose 48% to $1.2 billion.

Primark posted total sales of $8.9 billion, up 43% from last year, as comparable store sales and UK market share reached pre-pandemic levels.

The situation in continental Europe is not so rosy.

Primark said it would close two stores in Germany and streamline more stores after taking a $238 million write-down on the business there as sales have not returned to pre-pandemic levels. The company reported caution in continental European consumer markets.

Primark Click & Collect tests

Primark also recently announced that it will launch its new Click & Collect service in 25 stores across the North West of England, Yorkshire and North Wales before the end of the year. The mix of Primark stores participating in the new trial ranges from large city center and out-of-town stores to smaller locations on high streets, including Manchester, Liverpool, Sheffield, Blackburn, Carlisle, Sheffield and Wrexham.

The pilot will offer customers the chance to shop an expanded children’s range, spanning clothing and accessories, baby products and toys, and will also include hundreds of exclusive items to click and collect, and will mark the first time that Primark has offered customers the option to buy online and then pick up in store.

Primark CEO Paul Marchant has continued to highlight his company’s dedication to store-based retailing, particularly with the recent opening of its spectacular Belfast, Northern Ireland flagship, and has previously said the company wants to increase its stores from 530 to 530. the current 408 at the end of 2026.

Marchant says of Primark’s approach: “We continually challenge ourselves in the in-store experience. That includes how we design our trend rooms to showcase the latest products, how we collect stories, and how we complement the shopping experience with other social activities.”

The company now includes in some of its stores Disney stores, nail and beauty bars, cafés (including Friends Central Perk café, Disney Cafés, as well as Tasty by Greggs, which recently launched a store on Tottenham Court Road, London.

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