Penneys sales hit a holiday record as shoppers continued to spend
Budget fashion retailer Primark had a record week in the run-up to Christmas as shoppers hunted for bargains during the worst cost-of-living crisis in decades.
Owner Associated British Foods Plc said the retailer known as Penneys saw sales rise 18 per cent during the key holiday period as shoppers’ shopping baskets expanded and discounts on clothing items eased. The performance was better than expected and was ahead in all markets in which the apparel retailer operates.
The company, whose business ranges from groceries to agriculture, said it is also beginning to see the benefit of raising food prices in recent months to counter rising inflation, which has led to the biggest price hike in UK supermarkets in years.
However, AB Foods still expects the retailer’s profit margins to fall this year as it doesn’t pass on all higher costs to defaulting consumers. Earnings are expected to decline across the group this fiscal year as rising energy costs and a stronger dollar weigh on Primark, which generates most of AB Foods’ earnings. The company is targeting cost savings and has pledged not to raise prices further after raising prices last year.
AB Foods shares fell 22 percent last year.
AB Foods announced a 500 million share buyback in November. The company then said it had to raise prices at its grocery division, which sells everything from bread to tea and Ovaltine.
The conglomerate said that while inflation is still a factor, it is becoming less volatile and some commodity costs have fallen recently.
Earlier this month, Penneys launched an Irish website that allows customers to check stock levels before visiting their local store. Primark’s new UK website has seen traffic growth of around 85 per cent since last year, with the average number of pages per session doubling.
https://www.independent.ie/business/world/penneys-sales-reached-christmas-record-as-shoppers-kept-spending-42309962.html Penneys sales hit a holiday record as shoppers continued to spend