rimark shoppers are back in London and on Oxford Street in particular, but as a shopping destination it is far short of what it used to be.
So warns George Weston, the chief executive of Associated British Foods, the parent group of Primark that also owns Silver Spoon sugar and Twinings tea.
ABF today raised its profit forecast for the second time in four month thanks to strong trading in clothes and food.
But like other fashion houses including Superdry, Weston thinks Oxford Street needs help.
“There is a lot of improvement possible. Our stores are trading well, certainly up to pre-pandemic levels. But the area has deteriorated.”
The departure of some big names has lessened the street. “Debenhams is a big loss, House of Frasers, Top Shop has gone. There hasn’t been adequate replacements,” he said.
AB Foods, whose shares are up 30% this year, said Primark’s sales for the 2022/23 year should be around £9 billion – 15% ahead of 2021/22, with like-for-like sales up 9%.
Total profits should now be close to £1.5 billion.
Primark’s growth has been driven by selective price increases, well received ranges and strongly performing new stores.
Sales would have been better still but for poor summer weather.
Weston said it is actually a relief to be complaining about the weather again. “For the last three or four years weather was the least important factor. That we are moaning about the weather is a sign that things have returned to normal,” he said.
ABF shares rose 18p to 2019p today, which leaves the business valued at £15.5 billion.
Inflationary pressures and mortgage worries benefit Primark, Weston admits. “People are looking for better value,” he said.
The company began trialling click and collect recently and says that will expand to womenswear. It has famously always avoided internet sales saying they just add to transport costs for the company.
ABF moved food prices up last year, but doesn’t expect to have to do so again this year, a sign that inflation may be tamed.