Primark Cuts Prices by Up to 29% to Bolster Sales Ahead of AB Foods Spinoff

Fashion retailer Primark announced on Monday it is cutting prices by up to 29% on hundreds of its bestselling products. The move is a strategic effort to improve trading performance ahead of its planned demerger from its parent company, Associated British Foods (ABF.L).

Details of the Price Reductions

The lower prices took effect Monday across all of Primark's 19 markets, targeting core items in its womenswear, menswear, and kidswear collections. The company provided several examples of the new pricing structure in its announcement.

Key price cuts include:

• A women's single-breasted coat reduced from £26 to £22.
• A men's brushed check overshirt now priced at £20, down from £25.
• A women's supersoft boyfriend pyjama set cut from £17 to £13.

Strategy to Reverse Sales Decline

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This pricing initiative follows a period of weaker performance for the retailer. Primark recently reported a 2.2% fall in like-for-like sales for its third quarter ending June 20, which it attributed to a "challenging consumer environment."

The company stated that it is increasing investment in programs designed to "drive like-for-like sales growth." These price reductions are a central part of that strategy to attract shoppers and increase transaction volumes.

Context: The AB Foods Demerger

The push to strengthen its market position comes as Primark prepares to become a standalone entity. In April, Associated British Foods confirmed its plan to spin off the fashion chain from its portfolio of food businesses.

The demerger is scheduled for completion before the end of 2027. This move to lower prices can be seen as an effort to bolster Primark's financial standing and competitive appeal as it approaches its independent future.