Primark has announced profits are up 13% across its business despite the country being in the grip of a cost of living crisis. Here, fashion expert and author Lynne Coleman looks at how the chain is managing to buck the high street's downward trend.
There’s a lot to unpack when it comes to the anomaly that is Primark. A high street staple of over four decades, this beacon of fast fashion has watched its competitors close their doors one by one leaving it in prize place to attract shoppers wanting to spend their money.
Long gone are the days you could dizzy yourself trying on countless dresses from Topshop to Debenhams. When the Arcadia group went bust in 2021, the high street lost Burtons, Dorothy Perkins, Evans, Miss Selfridge, Wallis and Warehouse alongside their superstar brand Topshop. Our high street still bares the scars of the empty units across the country.
But with footfall finally edging back up, the bricks and mortar retailers that clung on by their fingernails in a post-pandemic world are now reaping the reward of their staying power.
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It’s here that the Irish multinational has shown real skill by creating a cheap pay-day treat experience that many premium and independent retailers can only envy. And in the cold light of da,y when many are faced with choosing to heat their homes or eating, Primark can provide that bit of escapism that consumers sometimes crave to soothe themselves from the harsh realities of 2023.
That serotonin boost provided by bagging a bargain is strong and Primark is able to give that in abundance from its clothing floors right across to home decor.
Then there’s the more sensible staples argument. Where are you faced with having to replace underwear or children’s clothing, companies like Marks & Spencer haven’t got an answer to Primark’s ability to make your pound go further.
Even charity shops sometimes struggle to compete with Primark on value. If you can pick up brand new piece of clothing for a pound, it cuts out the need to trawl though a charity shop that might not have the correct size or style you are after.
However, of course, there is the ethical debate.
We all know the impact fast fashion is having on the planet and, ultimately, our pocket as we bin millions of tons of clothing each year but when you are feeling the pinch ethics can slip from the hierarchy of decision making.
This shouldn’t be something we condemn the consumer for: value versus ethical shopping is a vicious cycle that seems like we’re a long way from solving.
Truth be told, if we didn’t have Primark on the high street, we’d see thousands of workers out of a job as retail continues to take a pummelling in our hostile economic climate, where inflation remains higher than France, Germany and Spain – where Primark also operates. As the company has announced plans to expand its operations in the US it seems that the Primark gravy train isn’t for stopping.
The retail giant also says it has benefited from the return of tourists and workers across keys cities around the UK.
Primark has been slow in giving shoppers the option to buy online. It seemed like an obvious business solution to allow customers to purchase online but the retailer has gone at a snail's pace in making this leap. It has opted to push everything back to its bricks and mortar outlets – concentrating efforts in an area of business with which it is familiar.
Now the arrival of click and collect roll outs, where online purchases can be collected from a store, are one of the new offerings to customers that are being credited for its strong financial position.
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This appears to have been a lucrative strategy when you compare it to another fast fashion giant such as ASOS. Last year the British fashion retailer reported an operating loss of £9.8 million, down from the previous year when operating profit amounted to £190 million.
This has been blamed on an increase in returns as consumer habits have changed beyond all recognition. Now shoppers happily make multiple purchases knowing they’ll only keep one item and return the rest of their basket. This has had a massive effect on the sales bottom line for ASOS.
What seems to be emerging from our post-Covid recovery is a new definition in what’s being dubbed essential. You can look over at another Irish based budget business for this comparison. Ryanair has reported a near record breaking profit of £1.2 billion on last year and expect to better that in 2023 – stating that this has been fuelled by a summer boom the company says will see a record number of passengers.
So what is really going on? The UK is in the grip of a credit crunch with none of the same spending habits as previous economic downturns. It’s difficult to speculate over the long-term impact of spending soaring in certain areas, such as cheap airfares and clothing, when some people are facing the prospect of having to collect groceries from food banks.
Will this trend last?
Our only comparison on wildly different consumer habits comes from our last pandemic 100 years ago when fast fashion and easy access airfares weren’t readily available which leaves us in the dark over current trends.
But something is clearly changing for our hard-earned coins to be finding their way to the coffers of businesses such as Ryanair and Primark.
For those businesses to be turning a profit in such precarious economic conditions it points to one thing: they understand their customers more than their critics give them credit for.
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