# Primark owner set for weaker profits as high gas prices to hit sugar arm

By Russ Mould — 2026-07-01

Russ Mould, investment director at AJ Bell, said: “Associated British Foods’ conglomerate structure has helped to cushion the blow from a miserable showing from its agriculture arm and weaker sugar operations. The grocery and ingredients arms were resilient, and Primark has made a comeback. Normally the weak parts wouldn’t be something to worry about, but plans to spin off Primark means future setbacks in any one division could be more pronounced.

“The sugar arm is a thorn in its side and ABF expects further deterioration in trading from this division. One must wonder how long ABF will persevere. If it’s in the mindset to separate the retail arm, perhaps it might also be giving serious thought to exiting sugar.

“Primark’s US operations were helped by opening new stores while the UK is holding its head above water. The separation of Primark isn’t expected to happen until next year, but ABF will be keeping its fingers crossed that trading shows a big improvement by the point of separation so that Primark gets off to a decent start as a standalone listed company.

“A lower oil price should help to improve consumer sentiment and potentially lead to more spending. But a lot may depend on who is appointed new prime minister and whether the public believe their policies will help to strengthen the jobs market and the economy.”

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