High street giants to reveal sales as bosses warn over rising costs

High street giants Primark and John Lewis will shed light on how sales are faring as consumers remain cautious and competition with cheap online marketplaces grows.

Primark’s owner Associated British Foods will give investors a full-year trading update on Wednesday, and the John Lewis Partnership will unveil its half-year results on Thursday.

It comes at a fraught time for the retail sector, with many companies and industry bodies warning they are being squeezed by rising costs.

Analysts are expecting Primark sales to grow by a “low single-digit” percentage over the year – having cut its outlook earlier in the year following signs of weaker consumer spending.

However, the low-cost fashion and homeware retailer indicated more recently that trading had improved on the back of better weather, helping boost sales of spring and summer lines.

Richard Hunter, head of markets for Interactive Investor, said Primark was the “jewel in the crown” of AB Foods – accounting for about half of its overall revenues, with the rest coming from its grocery, ingredients, and sugar businesses.

However, he said that “cautious consumer sentiment is already beginning to weigh on prospects”, particularly following tax measures announced in last year’s budget which were “seen as being particularly harmful to the retail sector”.

“The sector itself is famously competitive, and Primark now lines up against the likes of Chinese players such as Shein and Temu, while its online offering is still far behind that of Next.

“That being said, AB Foods is estimating that the continued rollout of stores will further boost sales growth, mitigating the damage already caused by weaker autumn trading last year.”

Primark’s retail director was among a group of more than 60 sector bosses to sign a letter sent to Rachel Reeves last month, warning against raising taxes in the upcoming autumn Budget.

The letter, sent by trade body British Retail Consortium, said it was becoming “more and more challenging for us to absorb the cost pressures we face” – referring largely to higher national insurance contributions.

Jason Tarry, the chair of John Lewis Partnership (JLP), which includes the department stores and grocery chain Waitrose, also signed the letter.

City retail analyst Nick Bubb said he “wouldn’t be surprised” if losses deepen for the group over the first half of 2025 as it faces cost pressures and ongoing investments into transforming the business.

It made a pre-tax loss of £30 million over the first half of 2024 – but generated a £97 million for the year as a whole.

“Even in a normal year, however, the partnership generates most of its profit in the second half of the financial year,” Mr Bubb noted, due to it getting a significant boost from Christmas sales.

Furthermore, data from analysts Kantar showed that spending at Waitrose grew by nearly 5% over the three months to August 10, compared with the same period last year.