Primark is set to announce £1.1BILLION sales hit over last six months and fears it will miss out on further £480m from continued closure of shops – but plans to have 83% of stores open by April 26 for £150m summer shopping blitz
- Primark has revealed how its finances were ravaged over the last six months
- Business is particularly damaged by lockdown as it lacks an online presence
- Budget retailer is confident it will see a huge sales surge when lockdown ends
Primark will announce a sales hit of £1.1 billion over the last six months amid the coronavirus pandemic, according to the retailer’s parent company Associated British Foods.
Bosses added they expect to lose sales of £480 million from store closures in the second half of its financial year as lockdown continues.
However, in a more optimistic note, the company says it expects the end of restrictions to be ‘very cash generative’ with £150 million of sales of spring and summer clothes left over from last year.
Primark expects to have 83% of stores trading again by April 26 as governments start easing Covid-19 restrictions, including 153 in England on April 12, based on current guidelines, and 20 in Scotland on April 26.
Non-essential shops in England will be able to open by April 12 at the earliest after more than three months of being shut down.
Primark has revealed sale losses of £1.1 billion over the last six months amid the coronavirus pandemic (stock photo)
The company said: ‘When stores were open, trading continued to be strong, with sales at -15pc on a like-for-like basis compared to last year. This performance should be seen in the context of lower category spend and lower footfall reflecting government advice to limit journeys from home.
‘Furthermore our hours of trading have been restricted, for example closure at the weekends in Italy and early closing in Spain, even where stores are open.’
Primark is particularly damaged by the lockdown measures as it does not have an online business to offset some losses from store closures.
On Brexit, the company said its businesses were well prepared for the end of the transition period and experienced no material disruption to its supply chains.
Discussing the results, Chris Daly, CEO at the Chartered Institute of Marketing said: ‘Three lockdowns later, and Primark remains at a huge disadvantage due to its lack of an online sales operation.
‘Today’s update reflects the catastrophic trading conditions Primark has suffered over the last year, unable to make sales while its competitors such as ASOS and Boohoo are cashing in on the surge in online shopping.
‘But the brand’s steadfastness of purpose ought to be admired, and with the Prime Minister’s roadmap out of lockdown now clearly defined, the retailers’ bricks and mortar presence will be critical in restoring footfall to Britain’s highstreets.
Hundreds of shoppers were seen queuing outside Primark in Fort Park Shopping Centre in Birmingham in December. The retailer is expecting a summer spending spree at its stores
The road map to recovery: The PM’s plan sees non-essential stores shut until at least April 12 after Easter
‘Primark has been cleverly leveraging its customers’ pent-up demand for the brand during lockdown; staying active on its social media platforms to tease fans with sneak peaks of its new stock, and in doing so, gaining thousands of likes and engagement.
‘Its marketing team now has a unique opportunity to drive home the importance of choice and variety when it comes to clothes shopping, hoping to convince customers back to stores, by reminding them that Primark can compete both on convenience and price.’
The British Retail Consortium’s chief executive, Helen Dickinson, said non-food stores have lost more than £22billion over the course of the pandemic.
Reacting to shops opening again, Ms Dickinson warned that every day a shop remains closed ‘increases the chances that it will never open again’.
She said: ‘We welcome the additional clarity provided by the Prime Minister. While we are encouraged by a plan for non-essential stores to reopen, the heavy impact of the pandemic means some may never be able to.
‘The cost of lost sales to non-food stores during lockdown is now over £22billion and counting. Every day that a shop remains closed increases the chances that it will never open again – costing jobs and damaging local communities.’