Penneys owner promises no new price hikes before fall 2023 as customers tighten their belts

Primark will not raise prices more than already planned before next fall, despite rising costs for the company, the parent company said.

B Foods said that as customers tighten their belts, they want to make sure they still see the brand as a cheap alternative to other high street retailers.

Therefore, the company will not implement any further price increases in its ranges until next summer, apart from those already implemented and those planned.

Chief Executive George Weston said: “Primark has faced significant input cost inflation and volatile exchange rates.

“We have chosen to keep pricing for the new fiscal year at the levels already implemented and planned, and to stand by our customers rather than pricing against these highly volatile input costs and exchange rates.”

The company said the decision was “in Primark’s best interest,” which will support its “everyday affordability and price leadership” and help it grow its market share.

Mr Weston added: “Primark’s sales, margin and profit increased significantly as more normal customer behavior returned in the wake of the pandemic.

“Significant progress has been made in expanding Primark’s digital capabilities, which will be a key element in Primark’s future development.”

The company is currently testing click-and-collect in 25 stores.

Primark’s like-for-like sales have largely returned to pre-Covid levels in the UK but remain weaker in continental Europe.

Despite rising costs, it’s been a good year for AB Foods — which also owns British Sugar, which makes sugar from sugar beets and grows medicinal cannabis.

The company said revenue rose by more than a fifth to £17 billion in the year to September 17, as profit before tax rose by almost half to £1.1 billion.

The grocery store is expected to grow sales significantly this year as it raises prices for customers, and AB Foods will also bring in some extra money from Primark’s already planned price increases.

However, adjusted operating income is expected to decline as the company faces cost increases.

It announced an 8 per cent increase in the dividend to 43.7 pence per share and pledged to buy back £500m worth of shares from investors.

Richard Lim, head of consultancy Retail Economics, said: “These are impressive results against the difficult economic backdrop.

“The retailer is well positioned to capitalize on consumers who are discounting their products and placing lower cost at the heart of their purchasing decisions.

“Many shoppers are willing to sacrifice the perceived quality and convenience of online delivery for lower costs and that is driving people back into stores in parts of the sector.

“However, the retailer faces a perfect storm of cost pressures created by rising input and operating costs and the impact of a weaker pound and rising interest rates.” Penneys owner promises no new price hikes before fall 2023 as customers tighten their belts

Fry Electronics Team

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