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Primark Warns Of 'slowing Consumer Demand' At Uk Stores

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http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8351691/Primark-warns-of-slowing-consumer-demand-at-UK-stores.html

Associated British Foods, the retailer's owner, said in an update that trading in the first three months of the financial year was strong despite the heavy snow over Christmas, with revenue 11pc ahead of last year.

However, the closely-watched like-for-like sales were lower than expected, sending the shares down 7pc.

Sales at stores open for a year or more up 3pc in the first three months of the financial year, against analysts' forecasts of 4pc.

Operating margins were also lower than last year due to the VAT increase to 20pc in January, cotton prices at an 150-year and rising oil prices.

"The UK consumer is feeling a squeeze because of inflation and the VAT rise and simply has less to spend," AB Foods Finance Director John Bason said in an interview after the trading update.

Primark has over 150 of its 214 stores in the UK and the rapid growth of the retailer, which earns around a third of group profit, has been a major driver of the recent performance of the company which also makes Silver Spoon sugar and Twinings tea.

Mr Bason said Primark's operating margins would be lower in its first half and stay under pressure in its second half as it aimed to stay competitive and not pass on all the cost rises to shoppers.

Is the consumer boom finally over? As Primark is one of economy shops with cheap clothes the retail sector appears to be heading towards recession, unless everyone has decided to move up market.

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We now have a double whammy, where credit is reducing and items like clothing cannot get any cheaper. Quality standards have been degraded over the last 20 years, so much so, that even M&S cannot be trusted anymore. (Naively bought a white shirt from them recently without looking at the label, and found it sticking to me in a 100% polyester induced sweat).

Hopefully people are slowly realising Primark does not offer a "bargain", but instead sell cheap, poorly made clothes that lose shape / texture / colour after just a few washes. Told the missus I would rather she bought expensive stuff more infrequently, than filling the wardrobe up with Primark tat, that is only used 2-3 times.

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We now have a double whammy, where credit is reducing and items like clothing cannot get any cheaper. Quality standards have been degraded over the last 20 years, so much so, that even M&S cannot be trusted anymore. (Naively bought a white shirt from them recently without looking at the label, and found it sticking to me in a 100% polyester induced sweat).

Hopefully people are slowly realising Primark does not offer a "bargain", but instead sell cheap, poorly made clothes that lose shape / texture / colour after just a few washes. Told the missus I would rather she bought expensive stuff more infrequently, than filling the wardrobe up with Primark tat, that is only used 2-3 times.

I suspect there is an element of that happening and hopefully it is (particularly as disposal fashion is bad for the environment and often not the best value) but people may also decide to make their clothes last longer in these straighten times.

Edited by koala_bear

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Primark's polo shirts went up from £2 to £4 over Christmas but they were recently back down to £2.40 so they must be seeing a slowdown.

M & S polo shirts seem stuck at about £20 -30 and John Lewis about the same.

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http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8351691/Primark-warns-of-slowing-consumer-demand-at-UK-stores.html

Is the consumer boom finally over? As Primark is one of economy shops with cheap clothes the retail sector appears to be heading towards recession, unless everyone has decided to move up market.

You have got things back to front. This is sure fire evidence that the recovery is locked in. Consumers are obviously feeling flush thanks to bullish economic growth and are therefore bypassing cheap Primark tat for more luxurious brands. Hurrah! :lol:

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We now have a double whammy, where credit is reducing and items like clothing cannot get any cheaper. Quality standards have been degraded over the last 20 years, so much so, that even M&S cannot be trusted anymore. (Naively bought a white shirt from them recently without looking at the label, and found it sticking to me in a 100% polyester induced sweat).

Hopefully people are slowly realising Primark does not offer a "bargain", but instead sell cheap, poorly made clothes that lose shape / texture / colour after just a few washes. Told the missus I would rather she bought expensive stuff more infrequently, than filling the wardrobe up with Primark tat, that is only used 2-3 times.

Primark

Wear once and chuck.

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The Primark in Bristol now occupies what was once a flagship House of FRaser store. Huge, 3 (or 4?) storey building. Went in there out of curiosity, all the same tat, in a nicer shop.

Ah, for the good old days when Primark was just another tatty shop on the high street.

My linkhttp://www.thisisbristol.co.uk/news/Work-Primark-s-new-Bristol-home-reveals-building-s-past/article-1066628-detail/article.htmlhttp://www.thisisbristol.co.uk/news/Work-Primark-s-new-Bristol-home-reveals-building-s-past/article-1066628-detail/article.html

But really, who wears the traditional Ralph Lauren polo shirt anymore? Is it even acceptable socially? :blink:

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I thought no one wore polo shirts anymore? :P

Really? :o You're mixing them up with the polo necks? :P

These days polo shirts seem to be as fashionable and popular as any other type of shirt and they're worn everywhere. Popular for sports as well.

I don't know but I just gave one typical example of the price differentials I've seen and that Primark, after hiking prices, seem to be reflecting a downturn now although M & S and John Lewis prices still seem stable comparing item for item.

For T shirts or any other kind of shirt etc the differentials/price moves are about the same.

Before Christmas Primark were getting on for about 10 times cheaper then they closed to about 5 times cheaper and then they went back to about 10 times cheaper.

Edited by billybong

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If they aint shopping at primark, then they aint shopping.

+1

I have heard more and more people talk about buying clothes at Asda, Tesco and Sainsburys.

If Primark is seeing a downturn then things are bad. I have been following user reviews of trousers on M&S website and that is interesting in that it appears more and more people are opting for the cheapest trousers... but complaining about how the quality has gone down since they bought an identical pair a few months back.

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Check out French connections share price! I did at 35p ;)

are they even worth 35p a share? the **** fad died about 5 years ago, used to see everyone wearing those awful 'f*ck* t-shirts, the chavs probably thought ooohh la la its french, therefore its designer, and it says f*ck on the front!

Nowadays, I bet if anyone dares wear a shirt like that they'll probably get laughed at as being out of date. Kinda like carrying around a nokia 3210!

fashion...lol

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Slightly off topic, but what are the best brands to buy for durability? I have an Energie denim coat which feels like it will last forever, what about every day wear?

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+1

I have heard more and more people talk about buying clothes at Asda, Tesco and Sainsburys.

If Primark is seeing a downturn then things are bad. I have been following user reviews of trousers on M&S website and that is interesting in that it appears more and more people are opting for the cheapest trousers... but complaining about how the quality has gone down since they bought an identical pair a few months back.

M&S is looking more and more like Primark each day. I walked into a Primark once by accident thinking it was M&S and couldn't find the food section :P straight up it took mecat least a minute before the penny dropped.

Tesco's clothes are horrendous, Asda and Sainsbury are alright and I only shop at these places for baby clothes as Next have become very pricey of late.

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Slightly off topic, but what are the best brands to buy for durability? I have an Energie denim coat which feels like it will last forever, what about every day wear?

SuperDry

very good quality, trendy and really good value TBH the coats aren't garish either, have a look.

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M&S is looking more and more like Primark each day. I walked into a Primark once by accident thinking it was M&S and couldn't find the food section :P straight up it took mecat least a minute before the penny dropped.

Tesco's clothes are horrendous, Asda and Sainsbury are alright and I only shop at these places for baby clothes as Next have become very pricey of late.

I haven't passed the threshold of M&S for over six months....I have to say I don't miss it. There clothes imo are not the quality they were and the good stuff is high fashion and pricy...the nickers and pants have also gone down hill in feel and quality.... ;)

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I haven't passed the threshold of M&S for over six months....I have to say I don't miss it. There clothes imo are not the quality they were and the good stuff is high fashion and pricy...the nickers and pants have also gone down hill in feel and quality.... ;)

Didn't Jeremy Paxman have something to say about them as well ;)

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are they even worth 35p a share? the **** fad died about 5 years ago, used to see everyone wearing those awful 'f*ck* t-shirts, the chavs probably thought ooohh la la its french, therefore its designer, and it says f*ck on the front!

Nowadays, I bet if anyone dares wear a shirt like that they'll probably get laughed at as being out of date. Kinda like carrying around a nokia 3210!

fashion...lol

Haha, will you just **** off over my stock picks... it was a punt after they sold off Nicole Farhi and it has given them cash-flow to shut down this less than profitable stores when they expanded overseas, especially in America (they didn't get the irony) and Japanese. I can see them operating only out of flagship stores, boutiques and airports in the not to distant future and maybe even go the way of YSL and end up in TK Maxx. They are a bubble stock and I certainly would not buy them now, as it is now I am waiting for my new account with a new broker to be up and running so I can find an 'investor' to sell them to. They have exceeded my expectations i had intended to sell them at 70p however my previous broker closed my account as I had transferred most of my BTL fund out and was no longer considered premier enough to be with them - it was only a £1k punt and all I wanted to do was make enough for a new iMac 21" :D

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We now have a double whammy, where credit is reducing and items like clothing cannot get any cheaper. Quality standards have been degraded over the last 20 years, so much so, that even M&S cannot be trusted anymore. (Naively bought a white shirt from them recently without looking at the label, and found it sticking to me in a 100% polyester induced sweat).

Hopefully people are slowly realising Primark does not offer a "bargain", but instead sell cheap, poorly made clothes that lose shape / texture / colour after just a few washes. Told the missus I would rather she bought expensive stuff more infrequently, than filling the wardrobe up with Primark tat, that is only used 2-3 times.

Oddly enough I felt the same until my daughter bought some expensive jeans, not being able to afford two pairs she also bought a similar pair from primark.

Both pairs were worn and washed the same, yet the primark pair lasted far longer without losing shape or fading. I was surprised. £60 V £8 ,

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