Full-year Primark guidance is for adjusted operating profits — before exceptional charges — of £300m-£350m, or a third of last year’s £913m © AFP via Getty Images

Are the shops half-empty or half-full? Sales at Primark, a fast-fashion chain, crashed by three quarters year-on-year in the third quarter, when coronavirus shut shops. But in the seven weeks after staggered reopenings began on May 4, like-for-like numbers were down just 12 per cent.

Plenty of consumers still fear infection. Plenty are newly jobless. Plenty more may become so. All things considered, Primark is doing well. In mid-June, sales in England and Ireland were actually higher than last year.

But be wary of extrapolating too much from a single retailer, especially this one. Brits have been deprived of Primark, a subsidiary of Associated British Foods that does not sell online, for 12 weeks. That means more pent-up demand. Cheaper price tags dovetail with the tendency to shop less often but buy more when you do. Discounts, surprisingly low at maybe a few percentage points across the board, will need to be bigger at higher-priced rivals. About two-thirds of Primark sales are non-fashion items such as tracksuit bottoms and T-shirts, the athleisure uniform du jour.

Investors rewarded UK-listed ABF by propelling its share price 5 per cent higher on Thursday morning; analysts revised estimates up sharply. Fair enough. Primark accounts for half of UK-listed ABF’s revenues and, last year, two-thirds of its profits. It has long been the driver of growth: groceries are pedestrian and sugar volatile.

Full-year Primark guidance is for adjusted operating profits — before exceptional charges — of £300m-£350m, or a third of last year’s £913m. At best, that means keeping second-half losses in the division to £100m. Pretty impressive for a retailer that was losing £650m of sales a month from lockdown.

Still, the broad range reflects broad uncertainties. This week, Primark’s Leicester stores were again closed due to escalating coronavirus cases. “Back to school” sales depend on children actually going back to school in September. That is the government plan — but so was the abortive return for primary school children before July. In the UK, returning to normality in everyday life and business is proving to be a stop-start process.

This article was amended after publication to reflect Primark’s status as a Dublin-headquartered business owned by a UK-listed parent.

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