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.”

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