Primark Owner Likely to Announce Drop in Sales Despite Increasing Sales in the UK

This week, Associated British Foods (ABF), the Primark owner, is anticipated to announce a drop in its sales. However, some analysts say that the brand is performing well in the United Kingdom.

ABF is set to publish its first-quarter trading update on Thursday, offering an insight into how the company performed over the Christmas period.

Analysts from Credit Suisse expect that the company will announce a one percent drop in like-for-like sales for the first quarter. However, the analysts said that sales in the United Kingdom would be positive.

During the annual general meeting last December, the total store space of Primark was 14m square feet, following the opening of five new stores for the brand, and the relocation of another two outlets. Credit Suisse said that this would give the firm a nine percent boost in sales at constant currencies. ABF will also benefit from the tax cuts of the Trump administration in the United States, said the analysts.

Primark and some other discount retailers have been said to benefit from a squeeze on consumer spending in 2018.

Last November, ABF said that its full-year revenues increased by 15 percent to £15.4bn, with operating profit rising by 22 percent to £1.36bn. Sales of Primark were up by 19 percent year-on-year, increasing from £5.95bn to £7.05bn.