Retail theory and practice about Primark

Assignment Brief

PRIMARK

Report 2500 words, 3^rd person, no bullet points. The report is about clothing fashion industry in UK having as example the PRIMARK store. The report has to contain:

Introduction to retail (150 words)

• Define retail
• Statistics UK fashion clothing industry

Introduction to the company (Primark)(250 words)

• Background of the company. When it starts? How many stores in UK? Sales? Use graphs, charts in appendix.

Key relevant to changes in the macro environment (PESTLE) 600 WORDS

• IT IS ABOUT how the factors: political, economic, social, technologic, legal and environmental affects from one side the clothing fashion industry and on the other side how does this factor affect PRIMARK.

1. 3.1. POLITICAL
2. 3.2. ECONOMIC
3. 3.3. SOCIAL
4. 3.4. TECHNOLOGIC
5. 3.5. LEGAL
6. 3.6. ENVIRONMENTAL

Key relevant in the microenvironment- Porter’s 5 Forces 400 words

Strategies / Tactics (750 WORDS)

FOR EXEMPLE IDENTIFY 3-4 FACTORES WITHIN PESTLE THAT THE RETAILOR NEED TO ADRESS IN ORDER TO BE SUCCESFFULL IN THE FUTURE.

Recommendation 125 words

Conclusion 125 words

References 12 Harvard style

Appendix

Sample Answer

The UK Fashion Retail Industry: A Case Study on Primark

Introduction to Retail

Retail refers to the sale of goods or services directly to consumers for personal use. It is the final link in the supply chain, connecting manufacturers with end-users. In the UK, the retail sector plays a major role in the economy, employing approximately 2.9 million people and contributing around £94 billion in gross value added as of 2024. Within this sector, the fashion clothing industry holds a significant position. According to Statista (2024), the UK`s apparel market generated over £54 billion in revenue, with growth driven by fast fashion, e-commerce, and shifting consumer preferences. The fashion retail industry is highly competitive and sensitive to economic, social, and environmental changes. Among prominent retailers, Primark has distinguished itself by offering affordable fashion, attracting price-conscious consumers across the UK and beyond.

Introduction to the Company – Primark

Primark is a leading fashion retailer known for its low-priced clothing, footwear, and accessories. The company was founded in 1969 in Dublin, Ireland, under the name Penneys. It expanded rapidly and entered the UK market in 1973 with a store in Derby. Today, Primark operates over 190 stores in the UK and more than 400 stores globally across Europe and the United States. The brand is part of Associated British Foods plc (ABF), a diversified international food, ingredients, and retail group.

Primark`s business model focuses on high-volume sales and cost efficiency. It does not sell products online, relying instead on physical stores to drive customer engagement and impulse purchases. In 2024, Primark’s UK revenue exceeded £5.8 billion, reflecting recovery after COVID-19 disruptions and increased consumer demand for affordable clothing amidst economic pressures. Its large stores, often located in city centres and shopping malls, attract significant foot traffic. The brand also benefits from efficient supply chain management and limited advertising expenditure, helping keep costs low and prices competitive. Data on store numbers and revenue growth can be found in the appendix (Chart 1: Store Expansion, Chart 2: UK Revenue Trends). Primark`s ability to offer trend-led fashion at low prices has solidified its position in the UK clothing market.

Key Relevant Changes in the Macro Environment (PESTLE Analysis)

The UK fashion clothing industry is influenced by various external factors analysed through the PESTLE framework, which evaluates Political, Economic, Social, Technological, Legal, and Environmental factors. These factors not only impact the industry as a whole but also specifically affect Primark’s strategic direction and operational performance.

3.1 Political Factors

Political stability in the UK influences consumer confidence and retail investment. Events such as Brexit have created uncertainty regarding trade agreements, import tariffs, and customs procedures. For Primark, which sources a significant portion of its products from Asia and the EU, changes in trade policy affect supply chain costs and delivery times. Additionally, government policies on employment, taxation, and business rates influence operational costs for fashion retailers. The recent introduction of free trade agreements with countries like Australia and India may present new sourcing opportunities for Primark, but the retailer must also remain compliant with labour standards and import regulations, which vary across regions.

3.2 Economic Factors

Economic conditions directly affect consumer spending on non-essential items like fashion. The UK has experienced high inflation, reduced disposable incomes, and slow economic growth in recent years. These factors have increased demand for affordable clothing, benefiting retailers like Primark. However, higher energy costs and wage increases put pressure on operational expenses. The fashion industry is also sensitive to exchange rate fluctuations, especially for businesses like Primark that import most goods in foreign currencies. A weaker pound increases costs, although Primark’s scale and sourcing capabilities may help mitigate this. Furthermore, the ongoing cost-of-living crisis has encouraged consumers to seek value-for-money options, which aligns with Primark’s low-price strategy.

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