Primark has revealed plans to cut hundreds of jobs in a shake-up of store management – as it pledges not to raise prices.
The fashion retailer is “proposing removing a number of roles as well as creating a new entry-level management role”, a spokesperson said.
Overall it expects to see a reduction of 400 jobs across its network of 191 stores in the UK, which currently employ 29,000 people.
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Details of the proposals, described as “part of our ongoing programme to improve the efficiency of our store retail operations”, were revealed in a trading update from owner Associated British Foods (ABF).
It pointed to an Omicron hit to sales at Primark followed by an improvement over recent weeks.
Like the rest of the economy it faces growing inflation pressures – but insisted it has no plans to put up prices.
Overall, the fashion retailer’s UK sales for the 16 weeks to 8 January were ahead of last year but still 10% behind pre-pandemic levels.
The company said it faced a squeeze on its raw material and supply chain costs but said this had been mitigated by favourable currency exchange rates and a reduction in store operating costs and overheads.
ABF said supply chain pressures experienced during the autumn had alleviated though it was still experiencing some delays at ports where goods were being shipped from, adding: “We expect longer shipping times to continue for some time.”
Flagging the jobs cut plans, the company said: “We are proposing to simplify our in-store UK retail management structure as part of our ongoing programme to improve the efficiency of our store retail operations.”
Kari Rodgers, Primark retail director for the UK, said: “The changes we’re proposing will deliver a simplified and more consistent management structure across all of our stores, provide more opportunities for career progression and offer greater flexibility.
“We are now focused on supporting our colleagues who are affected by these proposed changes and will be going through the consultation process.”
Meanwhile, Primark – which unlike rivals does not have an online retail platform – was on track to launch a new customer-facing website in the UK by the end of March, the company said.
It said the site “will showcase many more of our products and will provide customers with product availability by store”.
The update – and Primark’s confirmation that it does not plan to raise prices – comes as latest figures show rising inflation across the wider clothing sector amid a cost of living surge.
Rival Next has said it expects to hike prices by up to 6%.
ABF signalled that prices may go up in other parts of its business – a sprawling conglomerate which also includes a major sugar operation and brands such as Ryvita, Twinings and Ovaltine.
Laura Hoy, equity analyst at Hargreaves Lansdown, said: “Inflationary headwinds are an unavoidable storm cloud hanging over just about everyone right now, but we think ABF is well-placed to ride it out.
“The group’s low-cost retail business will appeal to shoppers tightening the purse strings, and improved efficiency across all areas of the business together with price hikes in the grocery business look likely to offset the bulk of the pain for now.
“But if costs continue to balloon, it could become a problem for Primark as the group has very little space to increase costs due to its position as a discount retailer.”