* Primark Q1 like-for-like sales rise around 4 percent

* Primark to open around 5 further stores in financial year

* AB Foods first-quarter revenue up 21 pct

(Adds interview with finance director interview)

By David Jones

LONDON, Jan 15 (Reuters) - Associated British Foods Plc said on Thursday that its Primark retail chain's like-for-like sales rose about 4 percent in its first-quarter over Christmas as trading beat its own expectations despite the economic slowdown.

The discount fashion retailer, which is investigating claims one of its UK suppliers used illegal immigrants paid below the legal minimum wage, saw total sales up 18 percent in the 16 weeks to Jan. 3, driven by new stores and underlying sales growth.

AB Foods Plc (ABF.L) issued a first-quarter trading statement for the entire group on Thursday, but attention was focused on the clothing chain, as the stores exceeded the group's expectations over the key Christmas period with "very good" like-for-like trading.

AB Foods said the group's first-quarters revenues rose 21 percent driven by Primark's sales growth.

"Primark's performance compares well with last year's 4 percent like-for-like sales growth, and in the first-quarter, it was again around 4 percent," AB Foods Finance Director John Bason said in an interview after the update.

Primark, which accounts for nearly one-third of group profit and has 187 stores in Britain, Ireland, Spain and the Netherlands, said its total sales for the first quarter rose 18 percent with all of the increase coming from volume growth with no price rises.

"I think the consumer slowdown is accelerating the trend we have already seen that consumers see value clothing as a good place to be," Bason said.

Primark, which is Britain's second-biggest clothing retailer after Marks & Spencer (MKS.L) in terms of sales volumes, hopes to add about five stores in its financial year to September 2009.

AB Foods, 55 percent owned by the family of Chief Executive George Weston, said it was still budgeting for flat net earnings for the year to September 2009 which it warned of in November 2008 due to investments in sugar and Primark.

"Overall, a positive update with the stand-out being the "very good" like-for-like performance at Primark," said Citi analyst Jeff Stent.

AB Foods shares dipped 0.3 percent to 673 pence by 0900 GMT in a UK stock market off around 1.2 percent.

Among the group's other businesses, sugar revenues rose 20 percent as European Union sugar regime reforms brought more stability to the sugar market and hence higher prices, while its grocery division saw sales up 21 percent although there was some trading down from its premium products like Twining teas.

AB Foods shares have risen 10 percent over the last three month pushing it to trade at 13 times 2009 earnings compared to Unilever (ULVR.L) (UNc.AS) at 12.4 times, which some analysts say is an unjustified premium given AB Foods' flat earnings outlook. (Reporting by David Jones; Editing by Karen Foster)