Value fashion giant Primark has reported a slowdown in demand, signalling how tough high street trading has become since the start of the year.

Parent Associated British Foods (ABF) revealed in a pre-close update ahead of interim results in April that trading in the first three months of the year was “strong” despite the bad weather before Christmas.

However since the New Year, “there has been a noticeable slowing down of UK consumer demand.”

Primark’s sales will be 11% ahead of last year and like-for-likes up 3%.

ABF said: “Operating margin in the first half will be lower than last year reflecting the increase in VAT in the UK and the impact on input costs arising from higher cotton prices which continue to rise. As previously highlighted, margins will remains under pressure in the second half.”

Primark has opened 10 new shops in the year to date, and by the half-year the total will be 214. Six openings were in the UK, two in the Canary Islands and one each in Germany and the Netherlands. ABF said that performance in Primark’s Continental stores has been “very encouraging”.

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