Here Comes Primark.

Back in late 2015, I predicted that Cheap Chic will Reign Supreme in 2016 with discount stores seeing continued success in a heavy retail market. One of those new entrants is Primark, a UK based retailer known for selling $10 jeans and $3.50 t-shirts. With over 270 stores worldwide, Primark has set its' sights on the US market with 8 stores planned. The first store opened in Boston back in September 2015. Morgan Stanley believes the chain will generate $650 in sales per square foot driving roughly $325 million with the 8 stores over the next 12-18 months. Wow.

Morgan Stanley recently ran a price comparison shopping exercise within the Boston market and what they found was appalling. On average across 100 similar items, 14 other retailers were an average 200% higher in price. Like for like competition and fast fashion houses like H&M and Forever 21 were at least 100% higher in price. Whilst Primark is likely looking to come out with a bang in the US market, these findings do not bode well for traditional retail or fast fashion houses. 

Consumer's desire for the lowest cost private label merchandise and heavily discounted branded merchandise continues. Primark is the latest entrant to drive private label price points lower. Those lower price points reset and lower the premium consumers are willing to pay for branded merchandise which in turn benefits the discount stores. 

One thing's for sure. Those who discount and those who make shopping convenient are winning. Primark falls into that discount bucket and will thrive.