Store closures at the hands of the coronavirus pandemic have seen sales and profit at the international retailer, Primark slump by as much as 60 per cent as reported in its full year financials ending September 12 2020. The value retailer has seen adjusted operating profit plunge to £362 million, while full year revenues fell 24 per cent to £5.9 billion.
These figures have been driven by a total loss of sales in the third quarter as stores were forced to shut under government-enforced lockdowns around the world – particularly in the UK, Primark’s biggest market. The retailer has been one to feel the impact of the pandemic the hardest, having no online operations in place at all.
But despite its trading performance, Primark has still managed to open 12 new stores in the financial year, bringing it total portfolio to 384 stores globally.
According to the Retail Gazette, Primark’s trading performance impacted the overall full year figures for parent company AB Foods, which reported a 40 per cent drop in operating profit to £810 million, while group revenues declined 12 per cent to £13.93 billion on an actual currency basis.
The retailer will now have to re-live the effects of a national lockdown, following the announcement over the weekend that England will enter its second country-wide lockdown from Thursday this week, closing all non-essential shops until early December. Yesterday AB Foods said it expected Primark to lose £375 million worth of sales as a result of the second lockdown period from November 5 to December 2.
AB Foods said the new restrictions would have a “significant” impact on Primark, although it still expected sales and profits in the retailer during the current financial year to be higher.
“I am proud of how our people have responded to the many challenges presented by Covid-19,” AB Foods chairman George Weston said. “Throughout, we have provided safe, nutritious food under the most extraordinary conditions, proving the value and resilience of our supply chains.
“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 £2 billion demonstrate the relevance and appeal of our value-for-money offering.”