There is little point raising fashion retailer Primark's low prices when consumers are short of cash, the boss of its owner said on Tuesday, adding that the group could expand its customer base if rivals take an alternative approach.
"With cash starved consumers there's not much point," George Weston, CEO of Associated British Foods, told Reuters.
He said if Primark raised prices further it would sell less and undermine its value credentials in the eyes of consumers.
"There's a chance we'll come through strongly with increased market share if others take different decisions on price," he said after AB Foods reported full year results.
Weston said Primark shoppers were generally being cautious on spending and budgeting more.
"People are buying essentials when they need them, not in anticipation of needing them," he said.
However, he noted that cold weather items, such as hats, scarves and coats, and items to keep people warm in the house, such as snuddies and thermal leggings have been selling "incredibly well, because we think people have been trying not to turn their central heating on."
Weston also reckons Christmas sales have started earlier.
"People are spreading their Christmas purchases across three or four pay days, rather than relying on cash that they have in hand in December," he said.
He said Primark stores in the UK were still performing better than stores in continental Europe.
"Northern Europe has a well developed habit of saving money when they know there's a bill to come, so Germany, Netherlands, Austria are all lagging on the sales front ... Spain and Italy are better," he said.