Primark freezes prices as owner warns shoppers are still cautious

Primark says it will not put its prices up this year, even though its owner warned shoppers are still cautious. Associated British Foods (ABF), which owns Primark, reported a 14% fall in profits on Tuesday.

Is Primark putting its prices up?

No. Primark says it does not plan to raise prices this year, despite big cost increases, including energy costs linked to the conflict in the Middle East. That should mean prices stay steady through Black Friday and Christmas.

How is Primark doing?

Primark’s sales rose 4% to £9.8bn in the year to 12 September, helped by new stores in Europe and the US and franchised shops in the Middle East. But like-for-like sales, which strip out new stores, fell 2.6%. Primark blamed a “challenging consumer environment across most markets”, although its UK sales improved after it cut prices.

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Primark’s retail profits fell by about 11%. Across ABF, which also owns Twinings, Ryvita and Patak’s, adjusted pre-tax profit fell 14% to £1.46bn. ABF says it is “cautious” about how shoppers feel and about inflation, and expects profits to fall again next year because of its sugar business. Twinings sales fell in the UK and France, which the company put down to the long, hot summer.

Is Primark being split from ABF?

Yes. Primark is due to become a separate company listed on the stock market. Chief executive George Weston said: “We are on track to complete the demerger of Primark from AB Foods in December 2027.”

Source: ITV News, Associated British Foods results. Photo: Mtaylor848 / Wikimedia Commons, CC BY-SA 4.0.