Primark Is Fastest Growing Retailer In US

Primark Is Fastest Growing Retailer In US

Primark, a low-cost, European apparel chain, is the fastest growing retailer in the United States, according to a report from the National Retail Federation's Stores magazine, which used sales data from Kantar Consulting. The ranking is based on year-over-year domestic sales growth. In 2017, Primark pulled in US$ 9.875 billion in sales worldwide. Its US sales are up 103% year-over-year as the company continues to expand along the East Coast. Primark has opened nine stores in the US since 2015 and has plans to open more.

Its expansion is timed well to take advantage of an explosion in value-oriented stores in the US. While department stores have suffered, off-price and dollar stores have experienced somewhat of a boom in recent times, enabling them to grow and add new locations across the country.

Between 2006 and 2013, the company grew at a rapid rate, opening stores across Europe, in Spain, The Netherlands, Portugal, Germany, Belgium, Austria, and France. Sales rose by 150% between 2009 and 2014. In 2015, it opened its first store in the US, in Boston, Massachusetts. At the time, analysts expected the store to pose a threat to rival US apparel stores such as Gap and Abercrombie, by undercutting them on price and offering a constant turnover of new styles.

A study done by Morgan Stanley in 2016 found that prices at Primark were, on average, 202% lower than average US apparel prices. Primark is able to keep its prices down by running a sleek logistics system, having limited advertising, and by buying products in bulk, which enables it to negotiate better prices from suppliers.

In the past, the company has come under fire for its cost-cutting supply-chain tactics and the conditions in which its clothes are made. In 2013, Primark was highlighted as one of the retailers that made clothes in the Rana Plaza factory in Bangladesh that collapsed and killed 1,100 workers. The company paid US$ 14 million to victims' families and signed an agreement to promote safety at textile factories.

Primark also keeps costs down by choosing not to operate an e-commerce store. Customers can view products online but are unable to purchase them there. Primark executives say it doesn't currently make economic sense to sell online because of expensive shipping and returns costs. The company would need to absorb these costs to keep prices down.