Stylish: Primark has collaborated with TV presenter Stacey Solomon on a clothes range
Primark sent a chill through the High Street after it warned of a challenging market in the run-up to Christmas.
It said trading was tough in November, sparking major concerns among analysts who had seen it as a rare bright spot in the ailing British shopping scene.
Richard Hyman, an independent retail analyst, said: ‘If Primark had a bad November, then God help everybody else. Primark is among the very best. However bad a November Primark had, the majority of other retailers in this market will have had a considerably worse one.
‘What will happen to them when we go into the new year is the real worry.’
The woes at Primark, which has collaborated with TV presenter Stacey Solomon on a range of clothing, raise the spectre of further job losses, store closures and failures across the industry if other companies face similar difficulties.
At least 50,000 retail jobs have been lost this year as shoppers desert town centres to buy goods over the internet, often from giants such as Amazon.
Primark’s parent firm Associated British Foods (ABF) said profits for its current financial year are likely to be at a similar level to the last one. It added: ‘During November, trading was challenging, in a tough retail market, but with careful inventory management and improved margins, our expectation for the increase in profit is unchanged.’
With its focus on low cost, a network of 360 stores and 75,000 staff, Primark has bucked the trend with solid revenue growth. Analysts fear that less stable rivals may be faring even worse.
Neil Wilson, of trading firm Markets, said: ‘We know it’s tough out there, and share prices across the piece reflect that already to a large degree. But Primark has done better than most and the fact that it, too, is facing severe headwinds is a concern for the sector as a whole.’
There is High Street concern over sky-high business rates, with chains forced to shell out millions of pounds in tax for stores that struggle to attract customers. Chancellor Philip Hammond bowed to pressure and agreed to slash the tax on small shops in the Budget, but many campaigners fear this will not be enough.
ABF shares fell 4.6 per cent, or 108p, to 2242p.