Primark says UK market share has risen after Covid lockdown

The budget clothing chain Primark has said its UK market share has increased after customers flocked back since it reopened all its stores, with trading better than expected.

Primark, owned by Associated British Foods, said customer spending on clothes, footwear and accessories had been recovering since hitting a low point in April during the Covid-19 lockdown when all its stores were closed. It reopened all 153 stores in England in mid-June, while its 112 stores in Germany, Spain and the Netherlands reopened earlier.

The retailer said when stores reopened customers crammed significantly more into their baskets than last year, reflecting pent-up demand, and while this has eased, the average basket size remains higher than a year ago.

Shoppers have been buying nightwear and leisure wear in particular, after a rise in home working, while lipstick is not selling well due to people wearing face masks.

Primark said it had been outperforming its rivals and in the past four weeks achieved its highest ever value and volume market shares for this time of year. By volume, it has long been the leader and its market share is now nearly 17%; and by value, it is 6.7%, behind Next and Marks & Spencer, according to Kantar sources.

In the UK, like-for-like sales since reopening are down 12% from last year, but if its four large city centre stores are excluded – its two flagship Oxford Street stores, Birmingham and Manchester – the decline is only 5%.

City centre stores are heavily reliant on tourism and commuters and have reported a large decline in the number of shoppers. By contrast, sales at Primark stores in retail parks are ahead of last year.

Primark was able to sell more summer and spring clothes than expected, which means it will hold over less unsold stock until next year, and markdowns have been low, compared with heavy discounting at other retailers such as M&S. As a result, its exceptional charge against inventory is £150m rather than £284m as previously flagged.

The firm expects to make £2bn of sales between the reopening of stores and the end of its financial year in mid-September. Full-year adjusted operating profit, excluding exceptional charges, is now expected to be “at least” at the top end of the previously stated range of £300-£350m , compared with £913m last year. It previously estimated that it lost £650m in sales a month during the lockdown.

Sales in Europe are down 17% on a like-for-like basis, reflecting increased public health restrictions, particularly in Spain and Portugal, while sales in the US are 9% lower than last year.

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