Retail Theory and Practice: Analyzing Primark in UK Fashion Retail

This report analyzes Primark, a major fashion retailer, within the context of the UK fashion industry. It begins with an introduction to retail and the company, followed by an examination of the macro-environment using a PESTEL analysis, considering political, economic, social, technological, environmental, and legal factors. The report then delves into the micro-environment, focusing on competitors, suppliers, and customers. It suggests strategies and tactics, including expansion, promotional changes, and a brick-and-click model, based on retail theories such as the wheel of retailing and retail lifecycle, to address challenges like changing consumer trends and technological advancements. The conclusion summarizes the findings and recommendations for Primark's continued success in the evolving retail landscape. The report highlights Primark's strengths and weaknesses, offering actionable insights for strategic decision-making and future growth.

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Retail Theory and Practice
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Table of Contents
Introduction......................................................................................................................................3
Retail............................................................................................................................................3
Company......................................................................................................................................3
Changes in Macro environment of UK fashion retail......................................................................4
Political Factors............................................................................................................................4
Economic Factors.........................................................................................................................4
Social Factors...............................................................................................................................5
Technological Factors..................................................................................................................5
Environmental Factors.................................................................................................................5
Legal Factors................................................................................................................................5
Changes in Micro environment.......................................................................................................6
Strategies and Tactics......................................................................................................................6
Recommendations............................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
Retail
Retail is considered as the process of selling services and goods to the consumers by using
different mode of distribution in order to earn profits. The term “retailer” refers to the service
providers that take the order in small quantity from large number of people who are end users of
the product or service (Lange et.al, 2018). The fashion retailing is considered as the “business of
buying clothes from manufacturers and selling them to customers”. Fashion retail includes
buying from the wholesalers, manufacturers and selling apparel, accessories and clothing to
customers (Petermans and Kent, 2016). To further get insight on the retail industry a company is
chosen named “Primark”.
Company
Primark is a fashion retailer founded in 1969 by Arthur Ryan in Dublin, and currently offers
range of products that include menswear, women wear, accessories, beauty products, footwear
and home wear in mainly the UK, America and Europe through its 350 stores. The company
expanded in the UK by acquiring Littlewoods Germany stores for £409m and after that company
expanded to Spain, Portugal, the Netherlands, and Poland. Primark largest store opened in
Birmingham in 2019 (Primark, 2019).
The main competitors of the brand in the fashion retailer are M&S, New look, Next, Lesara and
Select. The company is successful and a giant international fashion retailer because of its price
strategy. In 2018, Primark captured 6.9 percent market share in the clothing industry in the UK
and its competitors M&S remained on first with 8.1 percent market share and Next with 7.1
percent of market share in fashion industry of UK (Butler, 2018).
The retail fashion industry is shifting towards the online platform and many big players in the
market are closing their retail stores. In 2018, online sales in the UK rose by 13.6 percent and
due to that “high street stores suffered a 6.1 percent slump”. Primark is the one fashion retailer
who does not offer online products; the company’s strong performance in the market changed the
trend of online shopping in the UK. Primark influenced its consumers to buy from their stores

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and in that Primark’s social media activities and websites plays an important role. Primark has
many followers on Instragram (approximately 6 million) and social media followers are
increasing day by day out of that most of followers are young, they browse fashion trends before
heading into stores (Butler, 2018).
Changes in Macro environment of UK fashion retail
The business environment that affects the UK fashion industry consists of micro environment
and macro environment. The macro environment is a layer that affects the businesses in a great
manner (Wetherly, 2014). It includes broad environmental factors that affect the business
operation across all industries so to determine the changes in industries PESTEL analysis is used.
Macro level factors affect the manager decision making ability so it is important to understand
the various external factors that can harm the organization in near future. PESTEL analysis helps
in analyzing the factors related to political, economic, social, technological, environmental and
legal (Johnson, 2016).
Political Factors
Political factors that can impact the company are political instability, political tie up with other
countries, war and many more (Fletcher, 2013). In relation to the UK fashion industry, Brexit
impact was greater on the economy that caused economic and political uncertainty. This can
positively impact on the future profitability of Primark as due to “weak Pound fell against the
Dollar and Euro”. Further, political instability and this sort of deciiosn has impact on the
financial market, that leads to lower prices of shares and can affect the business operations of the
company. Further, the political decision taken in the UK was to impose higher taxes on online
retailers in order to protect the retail outlets, property taxes were cut down so that more of the
companies can open their stores and outlet. This impact Primark also as the company does not
have online presence so this can help the company to focus on brick and mortar and expand its
business (Thompson and McLarney, 2017).
Economic Factors
The issue of Brexit impact can be seen for longer times on the exchange rate of countries and
trade between countries that might affect the import and export of countries across the world.
Primark is an international retailer and has 350 stores for the company economic factors are to

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consider as this can increase their cost and this can affect the prices of their products (Rashid and
Barnes, 2017).
Social Factors
The social factors are related to the society habits, changing needs and preferences and
demographic of population. In the UK fashion retail industry the changes that identified or
impact the fashion retailers are ageing UK population and rising obesity issues (Moore and Burt,
2012). This affect Primark as now the company has to offer more plus size product in the market
and also get an opportunity to target ageing group. Further, changing buying trends of the people
are also affecting the UK retail industry almost of the younger population prefer online mode of
shopping. This can directly affect the sales of Primark in near future if this trend will increase
(Manlow, 2018).
Technological Factors
The technological factors include advancement of technology, using of online platforms for
shopping, using social media for promotion and influencing buyers with various videos and
blogs. In the UK fashion retail industry, sell of brick and motor retailers such as Primark are
declining. This can affect the fashion retailers to higher extent and might leads to closing down
of retail outlets. Primark influenced its consumers to buy from their stores and in that Primark’s
social media activities and websites plays an important role. Technological development and
shifting trends of consumer towards e commerce shopping can prove to be harmful for Primark
in near future. As the company does not have any online presence to compete with the giant
online retailers in the market (Pedersen and Netter, 2015).
Environmental Factors
Environmental factors are related the environment and society as it is the responsibility of every
business to follow all the environmental standards in their operations. UK fashion retailers are
lacking in following the environmental standards and providing safety workplace to its workers.
Not a single UK fashion retailer signed up action plan to reduce waste, water and to cut carbon
emissions and also failed to use sustainable clothing and organic clothing. The environmental
factors affect Primark as they get force to switch to organic clothing and frame policies to reduce

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the impact of their operations of environment. To abide to that the company already started using
recycled material and framed take back schemes (Gabbatiss, 2019).
Legal Factors
Legal factors are related to the policies and laws that a legal body frame in order to protect the
stakeholders and to ensure that all the business are run in ethical and legal manner. In retail
fashion industry, the competition is stiff and the companies are trying to copy products with
slight variation that leads to huge controversies and legal actions. Changing laws and policies
related to clothing manufacturing, labor and trade can affect Primark (Okonkwo, 2016).
Changes in Micro environment
Micro environment give insight about the immediate factors that affect the operations of the
company. Competitors, suppliers, customers, employees, government and investors are the key
holders that affect the Primark activities or operation. Primark offers products in different
segments and has wide range of clothing for men, women and children. Due to wide range
company targets younger adult and adult customers. Further, company provides this at the
reasonable prices as compare to its competitors H&M, Next and M&S. In the UK retail industry,
M&S has high market share and the company has presence over brick and mortar and brick and
click. This can affect the market share of Primark as the company is lacking the presence in e-
commerce sites (Henninger et.al, 2017).
On other side, M&S use extensive marketing strategies to promote its product across the world
and Primark has less focus on the promotional strategies rather the company invests in its stores
to give pleasant experience to its customers. Further, Primark has strong financial records and
resources this helps the company to adopt for more expansion strategies. Human and financial
resources of Primark help the company to get competitive advantage over its competitors as
these are non-imitable resources. The challenges that micro environment can bring for Primark
are related to the change in taste and preferences of customers, increasing competition from its
competitors in the UK retail industry, or can be poor productivity of employees or inefficiency
in the operations (Guercini and Runfola, 2015).

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Strategies and Tactics
The challenges that Primark can face in near future or that can have major impact on the business
are related mainly to the social factor and technological factor. These factors can influence
Primark activities and leads to major changes in the strategies and retail cycle of the company.
The challenges that are identified in the above analysis are mainly related to change in trends in
the retail fashion industry as people demand new and fashionable products on weekly basis.
Further, customer focus shifted to designer products rather than quality products. On other side,
competitor huge investment on promotion activities and advertisement can affect the sales of
Primark in the UK. Technological factors that can bring challenge for Primark are e commerce
retailing, delivery logistics, and social media marketing. These factors affect Primark because
Primark lacks technological advancement, has no online presence to sell its products, not in
touch with any delivery logistics and at last use of social media platform is less than other
competitors for promotion of products.
To overcome these challenges the company should change some of its marketing strategies in
order to compete in the market and in order increase its sales. For that retail theories can be used
that are wheel of retailing and retail lifecycle. The wheel of retailing theory highlights “that new
forms of retailing appear as price cutting, low cost and narrow profit margin operations”. Retailer
trade mainly at lower profit margin, by providing credit, by improving location of outlets and by
using display techniques.

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Figure 1: Wheel of Retailing Theory
Source: (Worrall and Newman, 2015)
Retail life cycle is another theory that focus on the cycle of products that starts with development
of product according to the market demand, than reaches to growth stage where products grows
and compete in the market, next stage is of maturity where product is no longer deliver the value
to customers, at last decline stage where product becomes obsolete and vanished from the market
(Fernie et.al, 2015).
With the help of these theories and considering the challenges that Primark fashion retailer might
going to face in near future few of the strategies are suggested that includes use of expansion
strategy, change in promotion strategy and opting for the model of brick and click. In relation to
the concept of retailing, Primark cannot increase its price as the brand is well known for offering
quality and designer products at low cost and the min strategy of the company is of cost
leadership strategy that cannot be changed but the increase in cost of production because of more
investment in promotion strategies can reduce the company profits. In order to remain profitable
it is important for the company to make its presence on online platform (McArthur et.al, 2016).
The challenges that analyzed during the micro environment analysis are related to the customers
and competitors. In fashion retail industry competition is increasing day by day, Primark

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competition from M&S and Next resultant in declined market share of the company. Further
looking into the wheel of retailing theory it is identified that low cost and higher retail margin
influence the new entrants to come in the fashion industry this might again leads to more
competition amongst fashion retailer. To survive in this competitive market the company has to
focus on its low cost strategy and to be proactive in developing the marketing mix for the
company as per the changing environment (Macchion et.al, 2015). Further to attract more
customers company should offers product to customers on both the platform that is online and
offline stores.
Recommendations
It is recommended that Primark should focus on its promotion strategies and expansion
strategies. The company should expand its business on online platform. Further, this can be done
by adopting better technological framework of operations in the management and by hiring tech
savy employees who can handle the online operations of the company or Primark can also
improve its technology by ensuring more automation in its processes and also in the retail outlets
to give advance experience to its customers so that its outlets and online platform both can work
and contribute in increasing sales of the company’s product. On other side, the promotion
strategies that can be used by Primark to promote its product are social media marketing, e mail
marketing and content marketing. All these can help the company to get competitive advantage
in the retail industry of the UK. If the company adopts these strategies then this can help the
company to overcome the social challenges and technological challenges that are identified
above.
Conclusion
It is concluded that retail industry is affected by various factors and Primark a fashion retailer
also affected by various macro and micro environment factors. It is identified from macro
environment that main factors that bring challenges for Primark are technological factors and
social factors. Further, in micro environment competition and customers are factors that affect
the activities of Primark. It is concluded with the help of retailing theories that in order to
compete in retail sector the company should focus on low cost strategy and try to reduce its
expenses and for that two recommendations are given firstly company should use expansion

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strategy and secondly company should change its promotion strategies or increase investment on
promotion of the products as these aspects are not affecting the company at present but can affect
the efficiency and profitability of Primark in near future.
Reflection
From the report that I made on retail industry earlier lacks many things such as proper analysis of
external environment of fashion retail industry in UK and use of retail theory in order to
understand the retail cycle of retailers such as Primark. I linked retail theory (page 6) after
getting feedback and further I included proper analysis of macro and micro environment of
fashion retail industry of the UK (page 4). I learnt from my mistake and corrected my report as
per the feedback. Now, I understand the practical scenario and how these big retailers work in
changing business environment. This will help me to deliver assignments in future in better way.

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References
Butler.,S., (2018). Primark primed to overtake Next as UK's No 2 clothing retailer. Accessed
From: https://www.theguardian.com/business/2018/jan/18/primark-primed-overtake-next-uk-no-
2-clothing-retailer
Fletcher, K., 2013. Sustainable fashion and textiles: design journeys. Routledge.
Gabbatiss,J.,(2019). Major fashion outlets failing to reduce environmental and social impact.
Accessed From: https://www.independent.co.uk/environment/fashion-environment-social-
amazon-jd-sports-direct-tk-maxx-environmental-audit-committee-a8755246.html
Guercini, S. and Runfola, A., 2015. Internationalization through e-commerce. The case of
multibrand luxury retailers in the fashion industry. In International Marketing in the Fast
Changing World (pp. 15-31). Emerald Group Publishing Limited.
Henninger, C.E., Alevizou, P.J. and Oates, C.J., 2017. IMC, social media and UK fashion micro-
organisations. European Journal of Marketing, 51(3), pp.668-691.
Johnson, G., 2016. Exploring strategy: text and cases. Pearson education.
Lange, F., Rosengren, S., Colliander, J., Hernant, M. and Liljedal, K.T., 2018. Bridging Theory
and Practice in an Applied Retail Track. Journal of Marketing Education, 40(1), pp.6-16.
Macchion, L., Danese, P. and Vinelli, A., 2015. Redefining supply network strategies to face
changing environments. A study from the fashion and luxury industry. Operations management
research, 8(1-2), pp.15-31.
Manlow, V., 2018. Designing clothes: Culture and organization of the fashion industry.
Routledge.
McArthur, E., Weaven, S. and Dant, R., 2016. The evolution of retailing: a meta review of the
literature. Journal of Macromarketing, 36(3), pp.272-286.
Moore, C.M. and Burt, S., 2012. Developing a research agenda for the internationalization of
fashion retailing. In Fashion marketing: Contemporary issues (pp. 68-85). Routledge.