Primark owner calls for longer post-lockdown shopping hours to claw back Covid losses
Shops should be allowed to open for extra hours on Sundays and evenings in December, Primark’s owner has said, to help retailers make up some of the trade lost during England’s latest high street lockdown in a safe way.
The cut-price fashion chain, which does not sell online, lost out on £2bn of sales and £650m of profit this year as a result of the coronavirus pandemic, contributing to a sharp fall in annual profits for the retailer’s parent group.
George Weston, the chief executive of Associated British Foods (ABF), which also owns Twinings teas, Kingsmill bread and Dorset Cereals, said he thought the government would try to “get the high street open” ahead of Christmas despite fears that the one-month lockdown might be extended.
He said: “It would be great if, for the time they do allow us to trade, they allow us extended hours through to Christmas. That would allow more people through stores safely. It would allow more shoppers to do their Christmas shopping on the high street and us to sell through some of our stocks we have in stores and depots.”
Weston suggested that 24-hour trading should be possible in some locations to help enable social distancing. He added that the lockdown was “very expensive for this business but I think it’s necessary”.
Primark has said it expects to lose £375m in sales during the coming lockdown in England, which Boris Johnson said would run to 2 December. The high street retailer has 387 stores globally, 153 of which are in England.
Many retailers classed as “non-essential” and set to close for a month from Thursday will trade online. Weston said that a move online was not an option for Primark because its prices were so low and it did not have the logistics in place.
“We have demonstrated that we don’t need to do it,” he said, noting that shoppers had quickly returned to Primark once stores had reopened after the spring lockdowns, with customers queuing around the block and handing it the same share of the market as before the pandemic.
Weston said that Primark’s sales and profits were expected to increase in the year ahead but it had the resources to cope with a year of multiple lockdowns if necessary. The chain has cancelled its final dividend for shareholders and pledged to pay for all autumn winter stock. Weston said orders from suppliers had not been cancelled despite the difficulty of clearing stores and warehouses packed with festive gear.
Primark’s sales dropped 24% to £5.9bn and profits slumped 62% to £362m in the year to 12 September after the chain was forced to close for three months during lockdowns around the world this summer. The chain’s profits had been expected to top £1bn this year.
The problems at Primark helped push ABF’s annual profits down 42% to £686m , with revenues 12% lower at £13.9bn despite a strong performance from its grocery and sugar processing businesses.
Weston said Primark had delivered a “robust performance, receiving an overwhelmingly positive response when it safely welcomed customers back”.
The company said it had been able to sell off its summer stock with minimal discounts. It took £98m in furlough payments for staff at closed stores during lockdown while other workers took pay cuts, helping to reduce overheads by half.
Sales of children’s clothing, leisurewear and nightwear rose above pre-Covid levels once stores reopened, but sales of men’s formal wear and luggage were down, reflecting working from home and restricted travel. Weston said sales of pyjamas were up 70% last week alone while he said suit sales were down by more than 80% for the year.
Primark’s city centre stores reported a “significant decline” in visitor numbers, but those in shopping centres and regional high streets welcomed a similar number of shoppers to last year once they were allowed to reopen.
Despite the global shift to online shopping, the chain expects to open 14 new stores in the year to September 2021 including four in the US and its first in the Czech Republic.