Retailer Primark will not hike prices further than planned before autumn 2023, its owner Associated British Foods [ABF] has said.
ABF has suggested that as customers face difficult financial choices and rein in spending, it will not hike prices for the time being to avoid making circumstances more difficult.
In the year to September, Primark’s sales were up by 43 per cent compared to the previous year, totalling £7.7 billion.
Yet, the company’s costs have also increased, with ABF chair Michael McLinktock suggesting that inflation had increased outgoings by £1 billion in the previous year.
Its ownership has said that the decision was also to ensure that Primark retains its reputation as a cheaper high street retailer.
ABF said in a statement: “Given a context of a likely reduction in consumer disposable income we have decided this year not to implement further price increases on the autumn/winter and spring/summer ranges beyond those already implemented and planned.
“We believe this decision is in the best interests of Primark.”
ABF CEO George Weston added that the company wanted to “stand by” customers in tough times.
While ABF acknowledged that retail has emerged from the challenges posed by the lockdowns through the pandemic, it warned that the impact of the cost-of-living crisis “remains uncertain.”
Meanwhile, the whole ABF group - which also includes food businesses - in the year to September enjoyed sales of £17 billion, with gross profit reaching £1.1 billion.
It is likely this has been driven by grocery prices rising 14.7 per cent in the year to October, according to recent figures by market researcher Kantar.
Photo by Jonathan Kemper on Unsplash
