Why Primark in Birmingham is set to increase prices on its autumn and winter ranges

Primark is set to increase prices on its autumn and winter collection as costs go up for businesses around the world.

The budget fashion chain has said it is set to make “selective” rises in the range, with prices due to increase for some clothing items.

Spread over five floors, the company’s biggest store in the world opened on Birmingham city centre’s high street in 2019.

Primark also has stores in The Fort Shopping Park, and there is also a store in New Square, West Bromwich.

Why are prices set to increase at Primark?

The world renowned brand is owned by AB Foods, which also owns Twinings and is a major sugar producer,

Primark has avoided most pressures from inflation until now because global exchange rates fell in its favour, The Guardian reports.

But AB foods said that changes are being forced on them as the US dollar is strengthening and inflation is soaring.

Despite price rises, the company said it still expects to see its sales increase because it is opening more stores.

What has Primark said about the autumn and winter price increases in its own words?

AB Foods chief executive George Weston, told the PA news agency: “Inflationary pressures are such that we are unable to offset them all with cost savings, and so Primark will implement selective price increases across some of the autumn/winter stock.

“However, we are committed to ensuring our price leadership and everyday affordability, especially in this environment of greater economic uncertainty.

“The cost of the energy they need to operate has rocketed in recent months, and the costs of the raw materials and staff they need are also rising.”

John Bason told PA that soaring gas prices have particularly driven the company to plan price hikes later in the year.

“We had not originally expected the level of inflation to last as long as we are going to see,” he said.

“The situation in Ukraine means industrial gas prices have jumped six-fold so meant we have had to reassess pricing.”

Primark expects to see its sales increase due to more stores opening, and expanding its so-called selling space by 10% compared with the end of the 2019 financial year.

“As a consequence, total sales for Primark in the second half are anticipated to be ahead of the second half of the 2019 financial year, which was pre-Covid,” AB Foods said.

What about the other brands owned by AB Foods?

The company added that it has seen a fall in Twinings retail sales over the past six months compared with a year earlier when people were drinking tea at home.

But this was offset by the launch of new products in its Wellbeing range of teas.

AB Foods’ pre-tax profit rose 131% to £635 million in the six months to the start of March, as revenue rose by a quarter to £7.9 billion.

Mr Weston said: “This half-year sales and operating profit for the group returned to pre-Covid levels.

“Our people have responded well to the many challenges we faced.

“Our food businesses have once again proved their operational resilience and sugar had another strong period, building on its recent track record of recovery.

“Measures to mitigate higher costs in all our businesses have been taken and more are planned.

“Primark delivered a significant increase in sales and profit, with stores now open and trading largely free of restrictions.”

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