Primark to cut 400 managerial jobs across UK stores

Owner AB Foods says sales were up at retail chain despite Omicron denting footfall

Around 400 jobs are set to be axed across fast fashion chain Primark’s UK stores as the group looks to overhaul its retail management team.

The retailer, which is owned by Associated British Foods, has launched a consultation with staff as part of plans to simplify its UK store retail management structure. It said the move aims to "provide clearer accountability, greater flexibility and more management support on the shop floor".

While it is creating a new management level role as part of the move it is also stripping out other roles and expects the changes to leave it with around 400 fewer retail managers.

Primark, which employs 29,000 staff in total across 191 stores in the UK, expects the consultation to take place over the next couple of months.

Associated British Foods said on Thursday that sales at its Primark fashion business over the 16 weeks to January 8th were up 36 per cent versus last year on a constant currency basis despite the rapid spread of the Omicron hitting customer numbers in December.

The Penneys owner said it was now seeing a recovery in UK and Ireland footfall.

AB Foods said Primark’s sales in the 16-week period on a like-for-like basis improved compared to the final quarter of its 2020-2021 financial year, while its operating profit margin was ahead of its expectations.

Primark has about 400 stores in Europe and the US but does not trade online.

It said all its stores remained open throughout the period, except for short periods in Austria and the Netherlands. Last Christmas its store estate was largely closed due to Covid lockdowns.

AB Foods also owns major sugar, grocery, ingredients and agricultural businesses. Revenue in these businesses were in aggregate 6 per cent ahead of last year on a constant currency basis.

Sugar revenue was driven by strong European prices, while its ingredients revenue was buoyed by a recovery in volumes from Covid-19-affected levels last year.

The group said all businesses have experienced inflationary pressures in raw materials, commodities, supply chain and energy. That has impacted margins in grocery and ingredients, where price rises have lagged the effects of input cost inflation.

AB Foods maintained its guidance for “significant progress”, at both the half and full year, in adjusted operating profit and adjusted earnings per share.

– PA, Reuters