Primark sales boosted by bargain-hunting tourists after pound's Brexit slide

Primark’s sales in Oxford Street were helped by a near 40% extension of its eastern store. Photograph: Peter Macdiarmid/Getty Images

Primark has joined luxury brands such as Burberry in enjoying a boost in sales from tourists drawn by the cheap pound.

Sales at the cut-price fashion chain’s two stores in Oxford Street, central London, were up 10% in the six months to 4 March as the UK’s premier high street benefitted from an influx of bargain-hunting visitors, particularly from China. That compares with a 2% rise in sales at established stores for the group over the period.

John Bason, finance director of Primark’s parent company Associated British Foods, said Oxford Street had been partly helped by a near 40% extension of its store at the eastern end of the street but this had only been in operation for half the period.

“Increased footfall in Oxford Street with tourists was a big driver. All you need to do is look on the street and you can see it,” he said.

Bason said there had been no noticeable impact on consumer spending in the UK since Brexit and that “not a lot” of expected price rises were feeding through on clothing.

Although the fall in the value of the pound against the dollar, which is used to buy the bulk of the UK’s clothing from far eastern suppliers, was large Bason said it was being offset by efficiencies in the supply chain.

“I think price rises will be later and less than people think because [businesses] are working hard on this,” Bason said.

Primark has vowed to take a hit on profits if needed to keep prices low.

ABF expects Primark’s sales over the half year to be 11% ahead of last year at constant currency rates, driven by increased retail selling space. With more than half the chain now overseas, the company said total sales would be 21% ahead at actual exchange rates – boosted by the increase in the value of the euro and the dollar against the pound.

Sales at established stores for the group were level but, mainly held back by a decline in the Netherlands, where older stores have been affected by the opening of new Primark outlets.

The company expects to open 300,000 sq ft of space in the next quarter with new outlets in Uxbridge in the UK; Charleroi in Belgium; Granada in Spain; Zwolle in the Netherlands and Staten Island in the US, as well as an extension to the Downtown Crossing store in Boston, Primark’s first store in the US in 2015.