Basket half full for Primark owner as revenues drop by a quarter

The owner of high street fashion chain Primark has reported that the brand saw its revenue drop by nearly a quarter this year.

Associated British Foods, which also owns companies including Twinings, George Weston Foods and British Sugar, said that Primark’s overall revenue in the year took a 24 per cent tumble, going from £7,792m in 2019 to £5,895m.

The group said that the decline was mainly driven by the closure of Primark stores during the UK’s lockdown, which it estimates caused the company to lose £2bn in sales and £650m of profit.

However, revenues for the group’s grocery, sugar, agriculture and ingredients businesses rose during the year, seeing increases of 2 per cent, 5 per cent, 1 per cent and 3 per cent respectively.

Adjusted operating profits for the food businesses increased by 26 per cent, partially offsetting the decrease in Primark’s sales.

The group reported that its overall revenues dropped by 12 per cent this year, falling to £13.9bn.

George Weston, chief executive of Associated British Foods, said: “I am proud of how our people have responded to the many challenges presented by Covid-19.

“Throughout, we have provided safe, nutritious food under the most extraordinary conditions, proving the value and resilience of our supply chains.

“Our food businesses delivered an adjusted operating profit increase of 26 per cent, driven by high demand and improved productivity.

“Following a three-month closure, Primark delivered a robust performance, receiving an overwhelmingly positive response when it safely welcomed customers back to its stores.

“Uncertainty about temporary store closures in the short-term remains, but sales since reopening to the year end of £2bn demonstrate the relevance and appeal of our value-for-money offering.

“We have the people and the cash resources to meet the challenges ahead and we are investing for the future.”