While sales rose in the 16 weeks to 6 January, like-for-like sales growth slowed significantly to 2.1% from 7% in H2 of FY22/23.

Louise Deglise-Favre, apparel analyst at GlobalData, believes this is partly due to a wider slowdown in consumer spend towards the end of the year, as the lasting impact of inflation in the UK and Western Europe started to take a greater toll on discretionary budgets.

But she says it is "worrying" given Primark "should have benefitted from shoppers trading down."

Geographically, in the UK, total sales in the period rose by 4.5% with like-for-like sales up by 3.8%. ABF pointed out that following the period's early warm weather challenges, sales grew strongly in the "run-up to Christmas."

In Europe excluding the UK, total sales in the period rose by 8.1%, with like-for-like sales up by 1.3%. This was attributed to a mixed performance in countries with some trading well and others impacted by a combination of strong comparatives in the same period last year and local economic conditions.

Sales in the US experienced a 45% growth during the same period, driven by the opening of new stores.

Moreover, the retailer's market share increased 0.1 percentage points to 7.1% for the 12 weeks to 10 December as opposed to last year.

Moving forward, ABF feels confident in the delivery of the Primark adjusted operating margin in this financial year, driven by a further improvement in product gross margin. It believes that both profitability and cash generation will be driven by a recovery in Primark margin along with marked improvement in its other brands.

However, Deglise-Favre warns that 2024 is likely to remain a challenging year for consumers’ finances, so Primark should ensure it markets itself effectively to remain at the forefront of their minds for apparel purchases, especially in some of its international markets where brand awareness is still building.

ABF stated that it continues to monitor the situation in the Red Sea, but at this stage the company does not expect any significant disruption to its supply chain.

Last year, Primark's revenue came in better than expected with an increase of 17% to £9bn ($11bn) in the year ended 16 September 2023, which ABF said at that time was supported by selective pricing and a well-received range.

In December 2023, the fashion retailer also announced opening of five new stories in Italy which will be equipped with self-service checkouts for the first time in Primark Italy.