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How long can Primark's offline strategy last?

Primarks’s bricks and mortar focus is savvy – but how long can it last, asks Catherine Neilan

Primark today confirmed it would not be renewing its deal to sell a select number of items via Asos, adding there were still no plans to launch a transactional website.

Conversely the business plans to open more bricks and mortar stores in 2013/14, having opened 16 in the UK in the current financial year. It currently has 257 stores in total.

Compared to the rest of the market, it seems Primark’s strategy defies logic: increasing its expensive store portfolio while failing to meet the customers’ ever-growing demands for an online offering.

According to financial director John Bason, the Asos deal met expectations and, judging from the response when it was first unveiled, analysts and industry experts agree it is an essential part of building the business’ future.

But Bason argues – convincingly – that in fact Primark’s current-to-medium term future is very much on the high street. Dismissing many of the woes we heard from the Grimsey Review last week, and have been hearing from the Portas Review camp for some time, Primark argues the high street is still very much alive, just evolving.

“Primark is part of the regeneration and renovation of the ever-changing high street. We see ourselves as a key part of the high street in attracting and generating footfall – what can be wrong with that,” Bason asked when we spoke this morning.

It certainly makes a change to hear a bullish business, confident its product can and does attract shoppers to the high street, and by restricting its online presence to virtually nothing, it can control traffic that way. Shoppers have to head to Primark’s stores because they are really the only way to buy Primark’s goods.

But nothing lasts forever. Although at the moment Primark is so popular people create petitions asking for the retailer to come to their town, there will come a point when the market is saturated with its stores, when competitors offering something similar steal a slice of Primark’s pie. If they have an online offer whoever this young pretender is will win by virtue of its ease of access.

Then Primark could well be left in the same position that many of its current rivals are now – stuck with an expensive, excessive property portfolio in towns that are in decline and surrounded by an increasing number of vacant units.

Primark’s belief that it can be part of the solution rather than the problem is laudable, and we could do with more retailers finding the right product and merchandising to get people in store. But it is unrealistic to think it has all the answers where so many others have tried and failed.  

Readers' comments (3)

  • At the moment, thank GOODNESS Primark are still on the high street - one of the few stores ( along with some of the "new" discounters in the health and beauty market) which are generally busy.......One cannot fail to be impressed by their constant positive performance. I recently visited the extended refurbished Manchester Primark - amazing shop fit, bang - on product and great staff. Primark creates a "must buy now" feeling, that could not be easily replicated online when having to wait 1-2 days for a low cost delivery option.

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  • Primark proves that you don't have to be online. Many people do shop online and many people don't, but having a online site is not the be all and end all, especially when some brands are just being carved up, negating the incentive for other retailers to go online.

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  • I think ASOS have something like a 30% return rate.
    Is that right?
    So if that would be similar for Primark, with their low price points an online offer could be tough.

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