Associated British Foods Warns Of £1bn Sales Hit From Lockdowns
Primark owner Associated British Foods warned that the loss of sales from store closures could rise to over £1 billion, with lockdowns in its main UK market and elsewhere in Europe shutting about 76% of its retail selling space.
AB Foods said in a statement that if all those stores stayed shut until its financial half-year on 27 February, then the loss of sales would reach some £1.05 billion, a 55% jump from 31 December when it warned of a £650 million loss.
Unlike many rival retailers who can continue to trade online during lockdowns, Primark does not have an online shop.
AB Foods said that it now expected the store chain's adjusted operating profit to be 'somewhat lower than last year', downgrading a previous forecast made in December for it to be higher.
Primark made a profit of £362 million in its 2019/20 financial year, which ended on 12 September.
AB Foods, which has suspended group earnings guidance due to the pandemic, also has a grocery division, whose brands include Kingsmill bread, Twinings tea, the Ovaltine drink and Jordans cereal, as well as major sugar, agriculture and ingredients businesses.
Grocery sales were up 7% in the 16-week period to 2 January, with Sugar sales up 6%, Agriculture sales up 10% and Ingredients sales up 3%.
Sales in its Primark retail business were down 30%.