ABF trading update: Primark's UK growth contrasts with European decline

Associated British Foods plc (ABF) today issued a trading update for the 16 weeks ending January 3, 2026, revealing a complex performance across its global operations. While the Group continues to navigate a difficult consumer environment, chief executive George Weston highlighted a stark contrast between the company’s resilient UK operations and ongoing weakness in continental Europe.

Despite the headwinds, management remains confident in the Group’s long-term growth trajectory, even as short-term sales growth for its flagship retail brand, Primark, is expected to remain in the low single digits for the first half of the year.

Primark faces regional divergence

Primark’s performance during the period was characterized by significant regional variance. In the UK, the retailer outperformed a sluggish clothing market, delivering a 3 percent increase in sales with like-for-like growth of approximately 1.7 percent. This gain in market share was attributed to strategic investments in product range, improved price perception, and the expansion of digital initiatives such as Click & Collect.

However, these gains were offset by a 5.7 percent decline in like-for-like sales across continental Europe, where consumer confidence remains brittle and UK-style recovery initiatives are only just beginning to take root.

Volatility and margin pressure

The brand’s expansion into the US also faced hurdles, as volatile retail conditions impacted both consumer sentiment and footfall. While the global store roll-out program contributed 4 percent to overall sales growth—including a milestone franchise opening in Kuwait—total sales growth for the period fell short of previous expectations. To manage inventory levels in this sluggish environment, ABF significantly increased markdowns, a move that has put downward pressure on Primark's profitability.

Consequently, if current sales trends persist, the Group expects Primark’s adjusted operating profit margin for the full 2026 financial year to hold at approximately 10 percent. While the immediate outlook remains tempered by tough trading conditions and the absence of a 20 million pounds non-recurring profit benefit seen in the prior year, the Group is banking on a broad range of new initiatives to revitalize sales and profitability in the second half.