Primark will leapfrog Next in 2018 to become the second largest player in the UK clothing market behind Marks & Spencer. Over the last 10 years the value clothing specialist has achieved the highest market share gains of all players in the sector, exceeding that accomplished by ASOS and JD Sports. A 10% rise in UK sales in the year ending September 2017 highlights that it continues to have huge traction among 16-24 year old female shoppers, with GlobalData’s consumer survey showing that over half of this consumer group have shopped for womenswear at Primark in the last year. Its ability to react to trends quickly, identify and promote key seasonal and novelty items, and offer value for money has maintained its appeal – while customer acquisition has also been achieved via store openings and refurbishments.
Next on the otherhand is in the same boat as its midmarket rivals Debenhams, Marks & Spencer and Arcadia, where it has struggled to achieve product relevance, improve supply chain flexibility and satisfy the varying needs of a broad customer base. Its market share decline stems purely from its retail division (stores) rather than Directory, with Next Retail’s share of the 2017 UK clothing market falling 0.4 percentage points on 2016 to 4.3%. Its cumbersome store portfolio makes it incredibly challenging to keep up to date, with outdated stores reflecting poorly on brand image and subsequently impeding physical footfall.
So will Primark make it to the top spot and become the UK’s largest clothing retailer? Currently 1.4 percentage points stand between it and Marks & Spencer, so any overtake manoeuvre is likely to take a minimum of four years. We do not anticipate M&S will make it easy for Primark to steal its crown, given that it has already invested in price and made improvements to product design and style – however the closure of space allocated to clothing will guarantee further share declines over the next two years, benefiting Primark.