Dublin-based retailer Primark, which trades as Penneys in Ireland, has no plans to slow down its ambitious expansion plans despite rising construction costs and the falling cost of living hitting its shoppers.
The company opened three stores in Europe last week – the well-publicised €10m opening in Tallaght; a Primark in San Sebastián, Spain, representing an €8.5 million investment by the retailer; and its second store in the Czech Republic in Brno, which represents an investment of EUR 9 million.
This was announced by Primark boss Paul Marchant Sunday independent the company opened 500,000 square meters of new space in the past financial year,
“The exciting thing is that we’re really starting to ramp that up now. As we begin a new fiscal year, we expect to open one million square feet of new space over the next 12 months.”
The company is also moving forward with plans to have 60 stores across the United States by 2026.
It has now opened 13 stores in America and has legal commitments to another 13 locations, he said.
Earlier this month, Associated British Foods, owner of Primark, issued a profit warning.
While pre-Covid sales in Ireland and the UK have recovered well, continental Europe has proved challenging.
The trading update said: “Compared to pre-Covid levels three years ago, like-for-like sales were down 18 per cent. In these markets, footfall has not improved in the fourth quarter (past three months).”
In April, the company announced some price increases, but recently said it had no further increases planned.
“Given the pressures that the whole economy is facing in terms of energy prices – fuel prices, currency fluctuations and headline inflation – we are seeing the prices of almost every commodity rising.
“But I think it’s important to always remember that retailers can set their prices where they see fit.
The company did not increase prices on children’s clothing
“Customers will tell you what price they are willing to pay. And ultimately we will always let ourselves be guided by that.”
He said the company’s goal is to “offer the best value for money on the high street, to continue bringing our customers new and exciting fashion products they can’t buy anywhere else at these prices.”
“But ultimately they will tell us what they are willing to pay. And then we have to react to that.
“And who knows where these energy and fuel prices will go over time. And if we see them step down in some way, we all have to decide how to deal with that from a pricing perspective.”
He said there has been no sign of a pricing pushback so far.
The company has been notoriously slow to sell online but will be trialling a click-and-collect service in select stores across England later this year. The online presence has also been improved.
“We relaunched the site about five months ago, initially in the UK which as you know is our largest market.
“We had a tremendous response to this relaunch.”
A key element of the new website is the ability for customers to review items at their local store before going to the store to purchase the item.
“The number of customers using this is significant and there is no doubt that this is a call to action for consumers.
“That is very convincing. So as we move forward over the next six months, particularly in early 2023, we aim to roll out the site to the rest of our markets, including Ireland.”
The click-and-collect sampling service focuses on children’s clothing, which is the retailer’s second largest category after women’s clothing.
“And the key component of that from a product perspective is that 40 pieces of product available through click and collect is absolutely unique to click and collect. You cannot buy this in any of our stores.”
He added that the company has not increased prices on children’s clothing.
Marchant declined to speculate whether click-and-collect would come to Ireland or other markets.
“It would be premature of me to predict where we are going next. From a strategic point of view, of course, we have many plans, we have many ideas. And this (Ireland) is such an important market for us.
“In everything we do in terms of strategic developments, Ireland is always at the forefront. We started in the UK because it’s our largest market and the most developed in terms of online shopping. That’s why we started there.
“But of course, we don’t want to end here.”
However, he said the company will continue to expand its store openings with additional facilities such as nail salons and coffee shops. The company is also promoting a second-hand/vintage offering in England.
“We certainly haven’t slowed down our growth and ambition,” Marchant said. “We firmly believe in stationary retail.
“We don’t see any change. We play an important role in making people look and feel good, with market-leading prices.”
https://www.independent.ie/business/irish/primark-to-expand-its-global-footprint-with-plans-for-one-million-square-feet-more-floor-space-41994675.html Primark is expanding its global footprint with plans to add a million square feet of floor space