Primark is an international fashion retailer, currently operating 475 stores in 18 countries. For the 12 months ending in September, it announced a 3.1% drop in revenues. More broadly, this downturn is marked by an unprecedented collapse in consumer confidence. Yardeni Research states that shoppers are cutting back on spending due to higher inflation and an uncertain economy. Their new chief executive, George Weston, understood then the storm that lay in wait. He said the weak retail market will continue to weigh on overall sales through late 2026.
Even with strong weather that usually drives people to spend retail dollars outside, Primark has been unable to bring customers through their doors. Steel is worried sales are on the verge of collapse as consumers get more risk averse. In response, they’re turning to cheaper fast fashion competitors—like Shein and Temu—to save money. Randeep Somel, fund manager at M&G Investments, noted that many shoppers are “staying at home and seeing how the Budget goes at the end of this month.”
Primark’s performance mirrors a concerning trend on the UK high street, where several retailers, including Bodycare, Claire‘s, and Pizza Hut, have faced significant challenges due to high operational costs and stiff competition from online platforms. New minimum wage and employer National Insurance contribution increases have significantly increased staffing costs. This wave of expense is creating even more financial strain on grocers.
Inflation continues to be a major risk to UK consumer spending, still above the Bank of England’s 2% target. With UK shoppers facing higher prices, households and consumers have been more choosy with their spending. This transition has most certainly left its mark on Primark, even with its size and size to market allowed it to remain.
Weston struck a tone of both confidence and caution when it came to Primark’s future. He stated that while he is “confident” about the company’s prospects for 2026, he recognizes that the market remains “particularly unpredictable at the moment.”
Richard Hunter, head of markets at interactive investor, hailed the retailer as a “jewel in the crown”. He underscored its lowly provincial status to its captive parent, Associated British Foods. He said this means the retailer has to be laser-focused on identifying opportunities for growth and going after them. That’s a big deal in international markets, where the young retailer is making inroads.
With increasing economic pressures and a changing consumer dynamic, Primark Executives have an arduous task ahead. The expected tax hikes from Chancellor Rachel Reeves could make life even harder for retailers who depend on discretionary spend.