The budget chain's 'cheap chic' image has thrived in downtrodden markets across Europe where consumers are suffering from wage pressures, unemployment fears and rising food prices. Like-for-like sales at Primark are expected to rise 3% for the full year, up from the first half's 2% rise. ABF said profits would have been higher still, had Primark not absorbed the effect of rising cotton prices.
Primark now has 242 outlets across the UK and Europe and has been steadily expanding. Five more were opened in Spain this summer, and a four-floor store is soon coming to London's Oxford Street.
Business is also going well in other parts of the group. ABF, which also owns brands including Kingsmill, Ryvita and Twinings said profits at its Silver Spoon sugar business for the full year will be considerably higher than last year thanks to rises in European and African revenues. The London-based group, which is 55% owned by chief exec George Weston and his family, was giving a trading update today ahead of the full year results release in early November.
ABF is continuing to hoard household food brands as it grows its grocery division. Its purchase of specialist flour business Elephant Atta this summer from Premier Foods for £34m has recently been approved by the Office of Fair Trading. The groceries business is ABF's sticky point, with earnings flat in the last year, but ABF is hoping to cash in on Elephant Atta's wide customer reach - around half of Britain's Asian families use the flour brand to make breads such as naan and chapatti .