Primark offers better value than US competitors

Fast fashion just got faster as a new survey cites US retailers are priced over 200 percent more premium in comparison to Associated British Foods owned Primark.

Research compiled by Morgan Stanley showed comparatively higher prices charged by American retail groups are proving tough competition, especially to US teen retailers. “Primark’s low price points could act as a disruptive force in US retail in our view,” one bank analyst stated.

Primark currently operates eight stores in the US, in addition to shop in shops in Sears.

Morgan Stanley’s survey included 14 stores across the Boston area with 100 like-for-like items. Express pricing was 399 percent higher, American Eagle Outfitters 360 percent higher, and the Gap brand 332 percent higher, all showing the greatest discrepancies.

On like-for-like items, excluding off-price retailers, JC Penney Co and Target Corp had the largest price variation, with items costing 198 percent and 154 percent more, respectively.

Walmart is Primark's major competitor

“Unsurprisingly, Walmart is the most competitively priced apparel retailer relative to Primark, although we still measured a sizable 36 percent Walmart price premium on average,” Morgan Stanley analysts also wrote.

Analysts believe Gap’s Old Navy, which is marketed as a “family value brand”, is one of Primark’s leading competitors. Old Navy, Forever 21 and teen retailers are most at risk from Primark’s model, it said.

“We think Primark’s similar offering but at even sharper price points could win over shoppers, particularly value-focused millennials,” Morgan Stanley wrote.

The bank also sees a high risk in womenswear, with items at US retailers priced an average of 242 percent higher than Primark.

 

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