Primark owner, Associated British Foods (ABF), has revealed that it expects sales at its fashion chain to dip by 2% in the second half of the year.

The group said it was operating in a challenging environment characterised by “consumer caution, geopolitical uncertainty and inflation”.

ABF was providing a trading update for its ongoing H2 period which will end on 13 September.

It has projected that in its retail division, Primark’s total like-for-like sales will be 2% below last year, with a decline of 2.4% in Q3 and a projected decline of around 2% in Q4. However, the group did report that its adjusted operating profit margin for the full year would be broadly in line with last year, which it said reflected Primark’s “strong operating model”.

“Primark delivered improved trading in the UK and strong sales growth in the US, while trading on the continent was softer in a weaker consumer environment,” ABF chief executive Goerge Weston, said.

ABF also reported that in its food division, its grocery sales in H2 are expected to be in line with the prior year, which it said reflected “good growth” in its international brands, while the company’s ingredients sales are also expected to be broadly in line with last year.

In its sugar division, ABF is expecting an adjusted operating loss, including in its Vivergo bioethanol plant which has closed, of around £40m.

“In our food businesses, overall trading in the second half was in line with our expectations,” Weston added.

“This has also been a busy period strategically, including the decision to close the Vivergo bioethanol plant, the restructuring of our Spanish sugar business, and an agreement for Allied Bakeries to acquire Hovis to create a financially sustainable UK bakeries business.

“Against a backdrop of continued volatility in 2026, we will start to see the benefit from our recent actions and continued investment.”

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