Primark sales continue to grow, manages supply chain carefully

By

Sandra Halliday

Published
Dec 10, 2021

Primark continues to prosper now that stores have reopened with the retailer’s parent company saying on Friday that trading and the margin in the year to date has been ahead of expectations. And it has seen improved like-for-like sales compared to the fourth quarter of its last financial year. 

Of course, it wouldn’t be difficult to improve on the performance of a year ago given that Covid restrictions were in place in more markets and that supply chains were severely disrupted.

That disruption continues but the company also said it’s managing it by “prioritising products most in demand with the support of our logistics providers for whom we are a very important customer. We have stock cover on the vast majority of lines for the important Christmas trading period”. 

The business also faces further potential issues given the new Omicron variant and the incidence of Covid-19 cases increasing even without the arrival of an even more transmissible strain.

Primark said that “the public health measures taken to date in our markets are mainly restrictions in trading hours in the Netherlands, the requirement for vaccine passes in Germany and the closure of our five stores in Austria”.

It didn’t say anything about its giant UK market, which is perhaps unsurprising as it’s currently unclear whether new Plan B restrictions that have been announced in England will have a big effect. They could certainly dent sales of partywear and affect the company’s trading in its city centre stores. Throughout the pandemic restrictions, the company has reported lower footfall to its city centre locations.

But the firm remains upbeat and said that for now, it expects Primark sales to be “significantly better than sales in the comparable period in the last financial year, from December 2020 to April 2021, when the estate was largely closed”.

That’s being helped by its ongoing store opening programme and since the year end it has opened two new stores, one in Vigo, Spain, and one in Catania, Italy. This takes its total estate to a milestone of 400 stores, trading from 17 million sq ft.