Associated British Foods has cut its guidance for Primark’s sales growth in 2025 blaming weak shopper sentiment in the UK.
ABF, which also owns major food brands like Twining, Kingsmill, and Dorset Cereals, said it is now targeting low-single digit growth this year for the retailer. Its previously forecast mid-single digit sales growth. Primark makes up half of ABF’s total revenue.
In the UK and Ireland, Primark’s like-for-like revenue fell 6.4% in the 16 weeks to 4 January, primarily due to cautious shopper sentiment and a lack of seasonal purchasing given the mild autumn weather. These markets make up approximately 45% of the retailer’s sales.
Globally, Primark’s sales grew 1.9% to £3.4bn due to its store rollout programme in Europe and the US. Total like-for-like sales – removing new stores from the comparison - were down 1.9%.
Morgan Stanley and Citi both lowered their ratings on ABF this week due to concerns over Primark’s sales outlook and mounting competition from online discounters. Citi is now forecasting a 4% decline in sales for Primark in 2025.
ABF’s total revenue grew 0.5% to £6.7bn in the 16 weeks to 4 January.
Grocery revenue grew 0.8% to £1.4bn driven by strong growth by Twinings and Ovaltine. Twinings saw good volume growth due to continued marketing investment, while Ovaltine expanded through China and Africa which more than offset the continued decline in powder sales in Thailand.
Sales of its UK-focused businesses declined overall, primarily due to lower volumes and sales in Allied Bakeries, as expected.
Ingredients revenue grew 3.5% to £687m with sales in ABF’s yeast and bakery ingredients business, AB Mauri, up 4% due to growth in its Central and South American markets. Its speciality yeast business, AB Biotek, also had an “encouraging” start to the year.
Sugar sales declined 2%, while agriculture was down 4%.
No comments yet