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A sharp rise in sales at budget fashion retailer Primark will help to boost full year profit at owner Associated British Foods (ABF). The performance helped the conglomerate offset sharply lower sales in its sugar division and the impact of the pound’s recent strength on overseas earnings.
Primark owner Associated British Foods says its sale volumes have now overtaken arch rival Zara in its competitor’s Spanish home market. The budget fashion chain, which said in a trading update that underlying annual sales should top 4.5 per cent, said Spanish trading has been exceptional, driven by low prices.
"Primark appears to have their fingers on the pulse in terms of product range, merchandise mix, visual merchandising, price point and quality to the extent that they have been able to rapidly expand and grow their store portfolio to almost 300 stores within a very short period of time," said Donald McFetridgelecturer at the University of Ulster´s Business School
Donald McFetridgelecturer also added that "customers these days are paying less and less attention to the price-quality continuum and instead have come to regard ´perceived value´ as a much more important performance indicator when it comes to purchasing catwalk fashion at high street prices".
"They look at a garment, check the quality and then consider the price in an attempt to help them make up their minds about whether or not the product is ´worth the money´ or not – and balance that with the usage of their proposed purchase before finally coming to a decision to purchase or not."
In the last financial year, Primark opened 1.4msq ft of selling space in 28 new stores, bringing its total number of shops to 278. The most recent being in Berlin and Bath. It also announced further plans to grow on the east coast of America following an earlier announcement that it would enter the market in Boston next year. It hopes to have ten outlets in a range of different shopping destinations, from indoor centres to department style stores, by 2016.
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