Primark's parent company, Associated British Foods (ABF), has reported a soaring increase in half-year earnings by more than a third.
This growth is attributed to new store openings, price hikes, and an improved business climate. The multinational food processing and retail company, also known for household brands such as British Sugar, Blue Dragon, and Dorset Cereals, acknowledged the persistent pressure on consumers due to the cost-of-living crisis.
It was unveiled that ABF witnessed a pretax profit of £881million in the six-month period ending in March, marking a 37% rise compared to the same time frame last year. The company linked this noteworthy increase to its prior investments focusing on expanding stores and streamlining parts of the supply chain, such as warehouses, for enhanced efficiency.
Group revenues experienced a modest rise of 5% hitting £9.7billion at constant currency. This was mainly fuelled by demand across retail and food businesses. Primark observed increased sales owing to newly inaugurated outlets and price enhancements implemented on some clothing lines last year.
These measures were taken as part of strategies devised to soften the blow of cost inflation. However, fewer items found their way into shoppers' baskets over the period. A reflection of continuing income squeezes felt by households.
George Weston, AB Foods Chief Executive, described these figures as a "very strong set of financial results". His observation highlighted how the company capitalised on the "restoration of some normality in our markets and in our supply chains".
He noted reductions in shipping costs and easing supply chain disruptions since the COVID-19 pandemic as evidence of this recovery. Mr Weston added that the recent attacks on container ships in the Red Sea have had less impact than feared, causing less than a week's delay to some shipments from China and South-East Asia.