George Weston, chief executive of Associated British Foods (ABF), the fashion retailer’s parent firm, told the PA news agency that it has seen rising energy and distribution costs but will not pass this on to customers.
“We haven’t increased prices at Primark over the past 10 years and we won’t do so this year,” he said.
“We have currency difference in our favour and there are other areas we have recognised to find cost savings so won’t pass that on.”
Primark rising costs on food
Mr West did however say that customers will feel the impact of rising costs across its grocery business – which runs brands including Kingsmill, Twinings and Ryvita – as the costs are “too big to absorb”.
He said: “In food we are having to pass some of the impact on to customers because it’s just too big to absorb.
“Energy prices have shot up, with natural gas trebling. Distribution costs have risen, labour costs have risen – it seems like everything is jumping up right now.”
Bosses at the consumer giant said they plan to open more Primark stores after hailing a “good” sales performance “in the face of continued disruption” during the pandemic.
It came as ABF posted marginally lower profits for the past year as a dip in sales at Primark due to trading restrictions was offset by “strong” sales in its food business.
ABF told investors that its adjusted pre-tax profits fell by 1% to £908 million for the year to September 18, as revenues stayed broadly flat at £13.88 billion.
The company’s grocery arm revealed that sales increased by 2% to £3.59 billion for the year.
It hailed “strong” sales growth in its Twinings Ovaltine drinks business, as well as international growth by other brands including Patak’s and Mazzetti.
Mr Weston added: “Our financial performance this year more than ever demonstrates the resilience of the group.
“This comes from the strength of our brands, the diversity of our products and markets, our geographic spread, conservative financing and an organisation design that permits fast and flexible decision-taking.”