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January 17, 2020updated 27 Jul 2022 6:59am

Primark’s international expansion strategy pays off

The fast-fashion giant Primark must continue to focus on overseas expansion to counter the challenging UK retail market.

By MarketLine  

The fast-fashion giant Primark must continue to focus on overseas expansion to counter the challenging UK retail market.

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The UK retail environment remains challenging, increasing reliance on international markets

Primark performed well in the UK overall in 2019, continuing to deliver a significant gain in market share, with sales growth of 2.5% driven by a strong contribution from new selling space.

Despite the company’s positive performance, Primark’s UK arm saw underlying sales fall marginally over the Christmas period, highlighting the challenging nature of the UK high street.

The UK is already saturated with a high number of Primark stores, with 189 spread across the country. In 2019, the company opened four new stores, including its highly anticipated Birmingham store, which is the largest globally.

Primark plans to open just one UK store in 2020, which appears to be a wise decision at present. Instead, the company can direct its financial clout toward the Eastern European and US markets, where growth prospects remain more positive.

Expansion across the Eurozone has proven to be lucrative

The strategy of expanding into international markets with potential strong growth prospects has served Primark well historically. Prioritizing this over domestic expansion in the future will be crucial in driving growth for the company.

Primark first forayed into continental Europe in 2006, with the opening of a store in Madrid, marking its ambitions to establish an international presence. Between 2008 and 2009, Primark opened stores in the Netherlands, Portugal, Germany and Belgium to take advantage of the growing apparel retail markets within these countries.

Since then, the company has continued to expand its geographical presence and now operates 360 stores across 12 countries.

According to the company’s 2019 annual report, sales in the Eurozone were 4.8% up on last year, with excellent sales growth in Spain and France and strong performances in Italy and Belgium.

In 2020, Primark expects to open 19 new stores together with a number of relocations and extensions, in which France and Spain will see the most space added.

The company also plans to launch its first store in Poland in spring. According to in-house research, the Polish apparel retail industry grew with a compound annual growth rate (CAGR) of 8.6% between 2014 and 2018.

Fortunes are changing for the company’s US operations

Primark entered the hard to crack US market in September 2015 and has since opened an additional eight stores, with plans to open its first store outside of the North Eastern Corridor, in Sawgrass Mills, Miami, in 2020.

At first, Primark struggled to find its footing in the US market, however, in 2019, the US business delivered strong sales growth which, coupled with lower operating costs, resulted in a significantly reduced US operating loss.

Furthermore, the positive reception by US consumers to Primark, combined with its profitable store model, has reaffirmed its commitment to establishing a wider presence in the US.

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Unilever- A Deep-dive into Product Launches and Advertising Strategy

Unilever product advertising is mainly through mainstream TV channels. Out of the products advertised so far at least 50% (over 850) of ads have been run on TV, while print media comes second with 496 ads. Unilever also utilizes social media platforms for advertisement. Unilever products are categorized by innovation ratings and tags in our product launch database. The North American region consists of almost 74 products with innovations related to the formulation of the product. Europe and other regions also have more products categorized under formulation-related innovation, followed by the packaging and positioning of the products. Most Unilever products are tagged with “High Vitamins”, “Recyclable”, and “Natural” tags to understand what the product differentiator is from other products available in the market. The majority of products belong to the personal care industry with a total of 5,788 products to date. This report, through the Unilever Example, illustrates how GlobalData Explorer enables you to:  
  • Track product launches by FMCG companies to get an understanding of the product-level strategies including geographic concentrations, innovation types, product claim, category focus and more
  • Monitoring the advertising strategies of various brands and gain insights into channel focus, regional focus, and more
  • Perform company-level analysis to understand business model, size, and geographic focus
Don’t miss out on key market insights that can help optimize your next investment – read the report now.
by GlobalData
Enter your details here to receive your free Report.