Better than expected Christmas for Primark – London Business News
Retail and food additives company Associated British Foods may not have made any upgrades in its latest trade update, but sentiment at the company is upbeat.
Talk of resilient consumer demand and easing inflationary pressures is telling and retail chain Primark had a good Christmas.
Russ Mold, Investment Director at AJ bell said: “Reliance on physical stores meant the pandemic was a major concern for Primark and a festive period with no restrictions clearly helped to get shoppers through the doors. It was remarkable that this part of the deal exceeded expectations.
“The fact that this has not resulted in a change in guidance reflects ongoing pressure on margins across all parts of the group, which may have proved somewhat disappointing for investors.
“Having avoided any meaningful web-based presence for so long, Primark is intensifying its click-and-collect efforts.
“This approach is logical as it allows Primark to capitalize on impulse buying as customers are still visiting stores and avoids large costs for delivery and returns of products which are usually very competitively priced.
“Primark’s budget offering could help attract new customers as cost-of-living pressures mount – particularly in areas like children’s clothing, where parents shop frequently and the longevity of the products purchased may be less important.
“The company itself certainly sees an opportunity as it continues to expand its store space, encouraged by the fact that newly opened stores are doing well.”