Summary
Shares of Associated British Foods, which owns Primark, fell by more than 10% due to concerns about consumer spending in response to cost of living pressures. This drop followed a company warning about challenging market conditions and cautious customer spending. Factors like weakened sales at Primark and competition from rivals Shein and Temu have influenced the situation.
Key Facts
- Associated British Foods' shares fell over 10% after warning about consumer spending issues.
- Rising inflation and unemployment concerns are affecting consumer spending.
- Primark's sales increased just 1% in six months, affecting its profit margins.
- Competition from brands like Shein and Temu is impacting Primark.
- Economists predict inflation could continue rising, impacting low-cost retailers.
- In the US, consumer spending has been more stable than in Europe, but concerns remain.
- US tariffs on imports pose challenges for Primark due to many products coming from China.
- Logistics and distribution costs have increased for Primark's US expansion.
