{"id":14906,"date":"2025-09-10T23:58:08","date_gmt":"2025-09-10T23:58:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/14906\/"},"modified":"2025-09-10T23:58:08","modified_gmt":"2025-09-10T23:58:08","slug":"primark-owners-boss-warns-reeves-not-to-give-consumer-sentiment-another-great-whack-in-budget-associated-british-foods","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/14906\/","title":{"rendered":"Primark owner\u2019s boss warns Reeves not to give consumer sentiment \u2018another great whack\u2019 in budget | Associated British Foods"},"content":{"rendered":"

The chief executive of the Kingsmill owner Associated British Foods<\/a> (ABF) has warned Rachel Reeves not to give consumer sentiment \u201canother whack\u201d in her upcoming budget, despite signalling that food price rises had peaked and will now start to ease.<\/p>\n

George Weston, the chief executive of the ABF conglomerate which also owns the fashion chain Primark and produces sugar and cooking ingredients, said recent food price inflation had been driven by employers passing on increases to labour costs announced in Reeves\u2019 first budget as chancellor<\/a> last year.<\/p>\n

He said most retailers had now passed these costs on and \u201cfood inflation will be gradually easing from now\u201d as the cost of commodities was \u201cpretty benign\u201d.<\/p>\n

George Weston said shoppers had reined in their spending due to high food prices. Photograph: ABF<\/p>\n

Grocery inflation stood at 5% in August, according to the latest data<\/a> from analysts Worldpanel, contributing to wider inflation, which rose to 3.8% in July.<\/p>\n

He added that Primark<\/a> had not raised clothing prices in a year as it had been able to offset higher labour costs with more technology, such as self-service tills and lower freight and cotton prices.<\/p>\n

Weston said given the higher food prices, Primark\u2019s shoppers had kept a tighter rein on spending than more affluent consumers.<\/p>\n

\u201cWe had to work very hard to earn our shoppers\u2019 money, as we are not in an easy consumer environment,\u201d he said, with sales in the UK and Ireland rising by 1% over the six months to 13 September, helped by new store openings.<\/p>\n

But shares in ABF slid more than 13% on Wednesday as analysts said trading at Primark\u2019s mainland Europe outlets had been worse than hoped. The company also warned that sugar profits would be below expectations. ABF\u2019s sugar business, which includes the closing Vivergo ethanol plant<\/a>, is also likely to make a \u00a340m loss, much deeper than feared.<\/p>\n

The company said group sales are expected to have fallen by 2% at established Primark stores in the six months to 13 September, with sales flat at established UK stores and sales falls in Germany, France and Italy.<\/p>\n

Weston blamed \u201cpolitical turmoil\u201d in France, which was the worst performing country, and consumer uncertainty elsewhere in Europe amid the Ukraine war and inflation.<\/p>\n

Weston said Primark was \u201ctrading very strongly\u201d as a seasonal change in the weather had led to demand for warmer clothing and it had sharpened up its fashion ranges, particularly on denim.<\/p>\n

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He said that Primark continued to gain market share in a flat UK market despite heavy competition from Shein, the Chinese-founded online fashion seller.<\/p>\n

Many retailers fear Reeves will impose further tax increases on businesses in her 26 November budget. Weston said: \u201cI hope consumer sentiment doesn\u2019t take another great whack in November \u2026 anything that reduces returns on investment or increases the costs of employing people [could affect sentiment]\u201d.<\/p>\n

Weston said he would like to see Reeves\u2019 November budget \u201cclosing that big loophole around de minimis\u201d<\/a> \u2013 a tax break that allows Shein and others to import items worth less than \u00a3135 direct to consumers without paying customs duty.<\/p>\n

\u201cI don\u2019t like to be faced with competition that has an unfair advantage which could be costing the Treasury maybe \u00a3100m a year,\u201d he said. \u201cA lot of money is being left on the table unnecessarily.\u201d<\/p>\n

He also called on the chancellor to revise plans to increase business rates for large high street stores.<\/p>\n","protected":false},"excerpt":{"rendered":"The chief executive of the Kingsmill owner Associated British Foods (ABF) has warned Rachel Reeves not to give…\n","protected":false},"author":2,"featured_media":14907,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-14906","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/14906","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=14906"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/14906\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/14907"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=14906"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=14906"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=14906"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}