- Kristopher Fraser |
Irish retailer Primark opened their first store in the U.S. in Boston last month. Opening the 77,000-square-foot location is a huge triumph for them, but other U.S. retailers should be paying very close attention to them. Primark's store is huge, and their prices are very low, the perfect kind of store for American consumer culture.
Price points for the store range from 3 dollars for a towel to 15 dollars for jeans. The company began in 1969 and has 292 stores in 9 European countries. Primark's prices are so low that they are even able to compete with many of the U.S.'s top fast-fashion retailers.
According to CNBC, prices for Primark are 40 percent below H&M, 30 percent below Old Navy, and 20 percent below Forever 21. The low prices are a result of the company manufacturing their own technology and their volume buying. They also don't do e-commerce, so they don't have to make investment into online efforts.
Primark posing a potential threat to many U.S. retail stores
Oliver Chen, a retail analyst at Cowen & Co, wrote to investors that "We view Primark as a new threat to department stores (Macy's), mothers shopping for family (Kohl's, Old Navy), and teen retailers given prices and full teen collections. Aggressive bra and sleepwear prices and children's key items may also impact L Brands and children's retailers (Ascena Retail Group and others)."
While Primark's primary market is young people ages 18 to 35, it's typical for multiple families to be seen stocking up on apparel and home goods at the store on any given weekend. The company's arrival to the U.S. is expected to do some major damage to teen retailers like Aeropostale and Abercrombie & Fitch. To date, no U.S. retailer has addressed the potential threat of Primark however.
Primark's Boston store is the first of eight stores planned to be opened in the U.S. by the end of 2016.
The company's lack of an e-commerce presence makes it seem less threatening, especially in an era where people do so much shopping online, but, it's difficult to argue with their incredibly low prices. It's too early to tell just how much U.S. retailers will have to worry, but with the arrival of their first store in the U.S., Primark is already proving to be a force to be reckoned with.