Primark has issued an update on prices amid soaring production costs.
George Weston, chief executive of Associated British Foods (ABF), the fashion retailer’s parent firm, told the PA news agency that it has seen rising energy and distribution costs but will not pass this on to customers.
“We haven’t increased prices at Primark over the past 10 years and we won’t do so this year,” he said.
“We have currency difference in our favour and there are other areas we have recognised to find cost savings so won’t pass that on.”
Primark rising costs on food
Mr West did however say that customers will feel the impact of rising costs across its grocery business - which runs brands including Kingsmill, Twinings and Ryvita – as the costs are “too big to absorb”.
He said: “In food we are having to pass some of the impact on to customers because it’s just too big to absorb.
“Energy prices have shot up, with natural gas trebling. Distribution costs have risen, labour costs have risen – it seems like everything is jumping up right now.”
Bosses at the consumer giant said they plan to open more Primark stores after hailing a “good” sales performance “in the face of continued disruption” during the pandemic.
It came as ABF posted marginally lower profits for the past year as a dip in sales at Primark due to trading restrictions was offset by “strong” sales in its food business.
ABF told investors that its adjusted pre-tax profits fell by 1% to £908 million for the year to September 18, as revenues stayed broadly flat at £13.88 billion.
The company’s grocery arm revealed that sales increased by 2% to £3.59 billion for the year.
It hailed “strong” sales growth in its Twinings Ovaltine drinks business, as well as international growth by other brands including Patak’s and Mazzetti.
Mr Weston added: “Our financial performance this year more than ever demonstrates the resilience of the group.
“This comes from the strength of our brands, the diversity of our products and markets, our geographic spread, conservative financing and an organisation design that permits fast and flexible decision-taking.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here