Primark pledges to ramp up spend in ‘consumer-facing activity’

Primark claims its “reinvestment” in the consumer through price and marketing has made it “competitively well placed” to succeed.

Following the launch of its first TV campaign last week (1 September), CEO of parent company Associated British Foods (ABF), George Weston, admitted on a call with investors today (10 September) the retailer is “convinced” it is going to have to “work harder to get the attention of shoppers” in an environment where consumer confidence is “not great”.

“Our investment in consumer-facing activity, whether it’s digital or whether it’s above the line, will be higher in the future than it’s been in the past,” said Weston.

Going forward, the CEO said the team will analyse the impact of the TV advert before deciding to create any similar campaigns. That said, Weston claimed early signs showed response to the campaign is “good”.

Alongside TV, there’s “lots of investment” in digital, including in an upcoming app and search engine optimisation. This comes after the company added digital to the chief customer officer role with the appointment of Matt Houston in July, following the departure of former marketing boss Michelle McEttrick.

Our investment in consumer-facing activity, whether it’s digital or whether it’s above the line, will be higher in the future than it’s been in the past.

George Weston, Associated British Foods

In the trading update for the second half of the financial year, Primark’s sales growth is expected to be around 1%, though total like-for-like sales in H2 around 2% below last year, with a decline of 2.4% in Q3 and a projected decline of around 2% in Q4.

Projections are that for the full year 2025 Primark’s sales will grow around 1%, with the store rollout programme continuing to drive sales growth of around 4%.

In the report, ABF also credited “focused cost optimisation and efficiency savings” for supporting a “step up in investment across product, brand and digital initiatives”. This has been coupled with “increased investment and focus on digital customer engagement”.

The company also credited “increased digital engagement” and strong womenswear products, alongside “favourable market conditions” for a good sequential improvement on trading in UK and Ireland. Yet trading in Europe remained “weaker”.

Weston said the “excellence in womenswear” is continuing into autumn/winter, adding that the “sharpening up of price perceptions” and an increase in consumer confidence has aided sales growth.

The ABF CEO also said “selective price reinvestment” has paid off for Primark, claiming “price gaps are as strong as they’ve ever been”.

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“We’re addressing, or we have addressed, the beginnings of perceptions around our pricing,” said Weston, adding the jeans category is where this work shines most.

The click-and-collect offering, which is now available across all 187 stores in Great Britain, has gained “good momentum”. The team has found “two sets of consumers” for its click-and-collect offering. The first are those who find it more difficult to get to the high street and want the “certainty” of knowing a product will be there. The second cohort are those who don’t have access to a full range in their local store.

“The range for them has effectively expanded because of click-and-collect. That effect we’re seeing and seeing well. There’s a second sale that we’re after, which is about extending ranges. So, leg sizes in jeans, for example, will be more available on click-and-collect and in some other product areas,” said Weston.

“All that experimentation is the way, but it’s not complete yet. There’s more to come.”