Primark has revealed plans to cut hundreds of jobs as part of the store’s management change – as it pledges not to raise prices.
« It is proposed to remove a number of roles as well as create a new entry-level managerial role, » a spokesperson for the fashion store said.
Overall, it would expect to see a drop of 400 jobs across its network of 191 UK stores, which currently employ 29,000 people.
Details of the offerings, described as « part of our ongoing program to improve the efficiency of our store’s retail operations, » were revealed in a trade update from owner Associated British Foods (ABF).
He noted that Omicron hit sales at Primark followed by an improvement over recent weeks.
Like the rest of the economy, it is facing mounting inflation pressures – but it has insisted it has no plans to raise prices.
Overall, UK fashion retailer sales were for the 16 weeks to January 8 prior to last year but are still 10% behind pre-pandemic levels.
The company said it has faced pressures on raw material and supply chain costs, but said this has been mitigated by favorable exchange rates and reduced store operating costs and overheads.
ABF said the supply chain pressures it experienced during the fall have eased although it continues to experience some delays at the ports from which goods have been shipped, adding: « We expect the long shipping times to continue for some time. »
Reporting on the job cut plans, the company said: « We are proposing to streamline the UK’s in-store retail management structure as part of our ongoing program to improve the efficiency of retail operations in our stores. »
Carrie Rodgers, Primark UK retail manager, said: “The changes we are proposing will provide a streamlined and more consistent management structure across all of our stores, provide more opportunities for career advancement and provide greater flexibility.
« We are now focused on supporting our colleagues affected by these proposed changes and will go through the consultation process. »
Meanwhile, the company said Primark – which does not have an online retail platform unlike competitors – was on track to launch a new website that engages with UK customers by the end of March.
The site « will display a lot of our products and provide customers with product availability by store, » she said.
The update – and Primark’s confirmation that it is not planning to raise prices – comes as the latest numbers show high inflation across the broader apparel sector amid a rise in the cost of living.
It was said by Rivalnext. Expect higher prices by up to 6%.
ABF has indicated that prices could rise in other parts of its business – a sprawling conglomerate that also includes major sugar operations and brands such as Ryvita, Twinings and Ovaltine.
“Inflationary headwinds are an inevitable storm cloud hanging over everyone at the moment, but we think ABF is well positioned to overcome them,” said Laura Hoy, equity analyst at Hargreaves Lansdown.
“The lower-cost retail business of the group will attract shoppers who are tightening their restrictions, and it appears that improved efficiencies in all areas of the business combined with higher prices in the grocery business are likely to offset the bulk of the pain at the moment.
« But if costs continue to rise, it could become a problem for Primark because the group has very little room to increase costs given its position as a discount retailer. »
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