AB Foods Share Price (ABF)

Mike Ashley ? How's he doing lately with Newcastle United and Debenhams? Food and utilities are defensive but not fashion retail. High Street is dying ... been out lately?

Food shortages possible if no deal Brexit - don't like the sound of that Dougie. Mike Ashley saying last night on the news that you don't see Primark, TKs etc. pulling out of the High Street at least I think that's what he was saying. Could he not afford elocution lessons.

I'm curious. In your years of watching this company, have you noticed any correlation between employment levels and Primark performance in LFL sales?

US market is huge.

I view this as an unusual opportunity to hold a defensive share that should do reasonably well in a downturn (food is still food, after all, and cheap clothes look more attractive when you don't have money), but that also has a significant potential upside in the US expansion.

Sounds like you just see downside for the company. Care to comment on the flaws in my logic?

WARNING : January 2014 the SP was 2590. I know coz I sold them then. Been in and out since then ... buy low sell high, etc. Days of £36 long gone. Historically they're on a 5 year downturn. They are still overpriced right now and 2000p would be fair price for a company who can't grow LFL sales. I will dip back in at that level. No, it doesn't make sense to open new stores - the initial risky overheads are massive and then you're into a cycle of declining LFL sales. Also online clothing retail is predicted to double in next 5 years . Go figure ... Primark will be left with a load of empty units.

LFL sales being down isn't news, we knew about that already. Primark has never really been about being cool, but being cheap. It's been the place to go when you are trying to keep costs down because money is tight. In that regard, ABF is a good defensive share in a recession -- when people lose their jobs, or think they might, they don't want to spend £30 for jeans when they can get them for £5.

IMO the reason LFL sales are down is because unemployment is low and has been low for long enough that a lot of people are more secure in their jobs and less concerned about saving every pound. I don't think it is that Primark has lost the market, certainly not permanently. And it certainly does make sense to keep opening new stores, even if LFL is down marginally, as long as they are profitable, which they are.