Primark UK sales hit by consumer caution as international markets drive growth

Primark’s performance in the UK and Ireland has been hit by ongoing cautious consumer sentiment, with sales falling by 4% in the 16 weeks leading up to 4 January 2025.

Its market share also saw a slight dip to 6.8%, while like-for-like sales decreased by 6%.

However, this decline in the retailer‘s largest market was offset by strong performances in Primark’s international growth markets, with the US seeing a 17% increase in sales, and Central and Eastern Europe achieving growth of 22%.

These regions contributed to Primark’s overall resilience, with the business reporting solid growth across several key markets, including Spain, Portugal, and France.

The UK retail environment remained challenging, with Primark’s results in the autumn months reflecting broader trends across the clothing market.

Despite the downturn, the retailer enjoyed a strong recovery during December’s key Christmas trading period, showing growth in categories such as menswear, kidswear, and nightwear. Collections by influencers such as Rita Ora and Paula Echevarría also proved popular, contributing to the uplift in sales.

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In an effort to improve its omnichannel capabilities, Primark expanded its click & collect service across the UK, now available in 158 stores.

The retailer’s store expansion programme also continues, with eight new locations opened, two relocated, and one extended. These new stores are expected to contribute 4% to overall sales growth.

Looking forward, Primark’s parent company Associated British Foods (ABF) has forecasted low-single digit sales growth for the year, driven by continued store rollouts in Europe and the US.

ABF expects Primark’s sales growth to be partly offset by weaker sales in the UK and Ireland, but remains confident in its ability to strengthen its offering through initiatives in product, digital, and brand development.

ABF CEO George Weston said: “Primark delivered good growth in Europe and the US, with continued consumer caution in the UK. Primark’s profit and margin delivery was strong and our low-cost operating model is working well. Our focus remains on sharp execution of our key growth initiatives across product, brand, digital and new market entry.”

Primark’s adjusted operating profit margin is expected to remain broadly in line with last year, with gross margin improvement and cost management helping to offset challenges such as wage inflation.

However, ABF has indicated that the retailer’s adjusted operating margin for the second half of the year will be lower due to the phasing of one-off benefits in the first half.

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