Primark despatched a shiver by means of the excessive road on Friday because it warned of “difficult” buying and selling situations, with Brexit jitters threatening the busiest purchasing weeks of the 12 months.
Gross sales on the UK’s third-largest clothes retailer, behind Subsequent and the market chief M&S, have been bucking the excessive road gloom however Primark warned of subdued gross sales for November as fewer customers visited its shops.
The impartial retail analyst Nick Bubb mentioned the replace would “strike concern” into trend retailers’ hearts as a result of Primark is considered as one of many sector’s extra resilient names.
John Bason, the finance director of Primark’s father or mother Related British Meals (ABF), cautioned: “This isn’t a name on Christmas – we’ve received three massive weekends developing now earlier than Christmas. However I feel it’s a name on fairly gentle climate throughout November and I feel it’s affected footfall.”
Bason instructed Reuters that whereas gross sales at shops open multiple 12 months have been “simply optimistic” in September and October, that they had turned destructive in November. He declined to provide exact numbers. ABF shares have been the most important fallers within the FTSE 100 on Friday, down greater than greater than 4%, regardless of the index’s rebound from its worst session for the reason that day after the EU referendum in June 2016.
The Primark replace added to proof of a slowdown in British shopper spending within the run-up to Brexit. The troubled Ted Baker enterprise reported disappointing figures on Thursday whereas John Lewis mentioned gross sales had slumped within the wake of report takings throughout the week of Black Friday.
November’s subdued figures mirror the cautious temper on the excessive road. Client confidence dropped by three share factors to -13%, the bottom stage this 12 months, in accordance with the long-running survey by analysis agency GfK.
Total shopper spending rose 3.3% 12 months on 12 months in November, the bottom progress since March, regardless of the enhance from Black Friday, in accordance with Barclaycard. Clothes spending contracted by 2.9%, the most important fall since October 2017, whereas spending on family home equipment was down by 14%.
Famed for its “low-cost stylish”, Primark mentioned that cautious inventory administration, coupled with improved clothes revenue margins, meant the retailer was nonetheless on observe for greater income within the coming 12 months. “It’s a blip that from a revenue perspective we are able to handle,” Bason mentioned.
Primark will open greater than 1m sq ft of recent promoting house within the coming 12 months, with shops deliberate in mainland Europe in addition to within the UK, together with its largest to this point, a 160,000 sq ft department in Birmingham Pavilions.