The discount clothing retailer Primark has again showed high street rivals a clean pair of heels with storming half-year sales, following a bumper Christmas of trading in the UK and rapidly growing sales at its fledgling Spanish business.
The 196-store chain, which is owned by Associated British Foods (ABF), grew underlying sales by 8 per cent for the six months to 27 February 2010, shrugging off the dire weather in January.
The sales followed a 5 per cent rise for the same period last year and are the latest set of figures in a series of powerful results from Primark, which has continued to take market share from across the high street during the recession.
The latest underlying sales from rivals Next and Marks & Spencer's general merchandise division showed growth of 3.2 per cent and 1.2 per cent respectively, albeit for different periods.
John Bason, the finance director at ABF, said that Primark's like-for-like sales in Spain – on stores open more than one year – were "exceptionally strong" over the half year and actually growing ahead of the UK business.
He said Spanish shoppers were responding positively to the brand in a similar way to when it was new to numerous cities in the UK 10 years ago. His comments are significant because Primark is slowly building a pan-European business and Spain, where it now has 14 stores, has been one of the toughest markets for retailers, such as the luxury brand Burberry, in recent years.
Primark also has stores in the Netherlands, Belgium, Portugal, Germany and Republic of Ireland, where it trades as Penneys.
Over the six months, ABF said total sales at Primark were "substantially ahead of last year" – the phrase it also used in 2009 to describe trading for the same half-year period.
Mr Bason said there was no slowdown in Primark's rate of growth in the UK. "They have got the consumer proposition right, the merchandising is very good at the moment and that value for money that Primark has always offered is just hitting the right note for the consumer."
ABF said that Primark would open a further six stores in the second half: three in Spain and three in the UK.
Last month, Primark agreed to buy 10 stores from the retail tycoon Sir Philip Green's Bhs chain. Mr Bason said: "It [the deal] shows there is room to expand in the UK."
Primark said that the impact of currency fluctuations on its operating profit in the first half was "mitigated, in part, by higher volumes".
ABF, whose other brands include Twinings and Ovaltine, said operating profit would be higher in all its divisions – sugar, grocery, retail and ingredients – than a year ago. But this was not the case for its agriculture business, which suffered from less trading activity in the UK grain markets.
In a trading update ahead of its half-year results in April, ABF said: "Adjusted earnings will show a substantial increase at the half year and we remain confident of very good progress in earnings for the full year."