Primark leaves high street rivals trailing

Bargain-hunting shoppers are continuing to drive sales at the discount fashion chain Primark. While the rest of the high street is feeling the impact of the credit crunch, the 181-strong chain of stores is continuing to perform strongly, its owner said yesterday.

Associated British Foods, the sugar-to-bread parent group, said it expected Primark sales to have grown 2 per cent during the second half of the year to September. After what was expected to have been a flat third quarter, analysts said this suggests Primark is experiencing underlying sales growth of 4 per cent – outperforming nearly all other clothing retailers, many of whom have been seeing negative growth.

John Bason, finance director, said: "There is no doubt consumers are being squeezed by the present trading environment. We were already doing quite well and so are well placed to benefit from this increasing switch to value-for-money clothing."

Primark plans to open 10 more stores in the next year, in the UK, Spain, and one in Rotterdam.

In Spain, which is in the grip of a severe slowdown, Primark is seeing healthy growth, suggesting shoppers are trading down as they have been doing in the UK.

ABF's grocery business also performed strongly in the second half. Allied Bakeries was helped by pushing through two price rises for its best-selling Kingsmill loaf. But the group warned that sugar earnings would be sharply lower because of European Union reforms which have led to reduced prices.