23 Mar 2020
Posted in Coronavirus
Primark risks losing top spot in UK clothing market due to lack of transactional website, says GlobalData
Following today’s news (Monday 23 March) that Primark is set to lose £650m of net sales per month while its stores are closed:
Chloe Collins, Senior Retail Analyst at GlobalData, a leading data and analytics company, offers her view:
“Primark’s lack of transactional website has placed it under additional pressure in the midst of the coronavirus pandemic, with the retailer having no way of making up the £650m net sales a month it will lose globally from its closed stores.
“In the UK, it risks falling from the top spot in the clothing market this year, as its two closest rivals M&S and Next have the benefit of online operations – with the latter most likely to secure sales over the next few months thanks to its strong branded offer and efficient fulfilment.
“Though Primark has previously denied that launching a transactional website is in its short-term plans, this unprecedented event will provide it with clear impetus to rethink its bricks-and-mortar only strategy.
“After months of social distancing and self-isolation, consumers are expected to prioritise spend on leisure and experiences more than ever, meaning overall non-food retail spend will struggle to rebound in H2.
“While mid-market players are likely to lose out, GlobalData expects Primark’s value proposition to retain its top-of-mind appeal. When stores reopen, heavy discounts will be needed to clear existing seasonal summer stock that will have a limited selling period, however the company’s decision to cancel all future production orders will at least mitigate these risks and prevent it from becoming overstocked.”