Penneys-Primark cautions about outlook after strong Christmas sales          

Clothing retailer said it continued to encounter significant cost pressures

The group said Primark's revenue was £3.15bn (€3.56bn) in the 16 weeks to January 7, up 15% as it benefited from 'very strong' trading in the run-up to Christmas, with record sales in the week to Christmas Day.

Clothing retailer Penneys-Primark reported better-than-expected trading over the Christmas quarter as shoppers returned to stores, its parent Associated British Foods (ABF) has said, but cautioned economic headwinds may dent consumer spending in 2023.

After two years of pandemic restrictions, a feature of Christmas 2022 was a return of shoppers to physical stores across Europe. 

Primark trades from 416 stores across Europe and the US. It does not trade online but is trialing a click and collect offer for children's products in Britain, and launched a new digital site in the Republic. 

It recently fully reopened the Bank Buildings store in Belfast city centre, expanded its store in Galway's Eyre Square, and plans to open 17 new stores in the US and Europe. 

The group said Primark's revenue was £3.15bn (€3.56bn) in the 16 weeks to January 7, up 15% as it benefited from "very strong" trading in the run-up to Christmas, with record sales in the week to Christmas Day.

AB Foods said consumer spending had proven more resilient in the quarter than anticipated at the start of its financial year.

"To date, Primark trading has been good in all our markets and was ahead of expectation," the group said. 

"Early trading in this new calendar year has been encouraging but macro-economic headwinds remain and may weigh on consumer spending in the months ahead," it said. 

It said it continued to encounter significant cost pressures but inflation had become less volatile and recently some commodity costs had declined.

Sales in the group's grocery business, which includes Twinings tea, Jordans cereals, and Ovaltine drinks, rose 9% to £1.39bn over the 16 weeks, but inflation in input costs was continuing to run ahead of pricing to recover margins. 

• Reuters and Irish Examiner