The news that it sales are up 20% in the 40 weeks to June this year may be surrounded by wailing and gnashing of teeth from its neighbours on the UK high street, but the sweet cooing of success continues to emanate from Primark. The rise reflected an increase in retail selling space and excellent like-for-like sales growth, according to parent Associated British Foods.
Less apparently buoyant competitors frequently complain it’s hard to work out exactly what’s going on at Primark as ABF is very sparing about the detail they provide on its subsidiary’s numbers. But things do appear to be going well.
The rapidly expanding outfit, having apparently shrugged off a dose of bad publicity about the origins of some of their cheap threads, now trades from 190 stores with 5.7million sq ft of selling space. It is spreading to Europe and has opened stores in Bremen, Lisbon and Barcelona, the latter city no slouch when it comes to fashion.
But how long can this growth continue? We may not be out of the dark woods of downturn yet but the flight to value may well tail off before too long. When things finally pick up who will want to broadcast the fact that they are still buying cheap and cheerful? Maybe folk will go back to wearing a disguise when they venture into Primark, or Lidl or Aldi for that matter.
In the midst of Primark’s success comes some interesting research from the advertising agency JWT which says that Brit youth is among the most fashion-obsessed in the world. You don’t say. The US-based agency spoke to 18 to 29 year olds in Britain, the United States, Brazil, Canada and Australia and questioned them about these straitened times.
If they had to cut-back which areas would be the last to feel the knife? What could the youth simply not do without? The Brits ranked buying new clothes as 4th on the list, higher than any other country in the survey (More important were the internet, mobile phones and pay TV. So few surprises there.) To the amazement of all and sundry British youth – often stereo-typed as a bunch of binge-drinking outlaws – put alcohol only 16th on their list. American kids had boozing as their 5th most cherished pastime which is surprising as both you and your parents can wind up in the county jail for taking a sip of Jack if you haven’t reached the legal drinking age in some States.
It is to the intense relief of retailers everywhere that recession has so far failed to impact on young people’s attitudes to spending. Consumerism is still the religion of choice and, JWT notes, living through 16 years of uninterrupted growth has given the young an innate sense of entitlement.
So whether they choose to spend their dosh in Primark or not, it seems unlikely that the kids will stop spending unless they absolutely have to.
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