Primark is a fashion Retailer in Europe which trades as Penneys in Ireland. It has 223 stores currently operating in Ireland, UK, Spain, Germany, Portugal, Netherlands and Belgium with 38 stores in Ireland. There are plans to open more stores in the next few years particularly in Germany. Primark now operates from 7.2 million sq. ft. of retail selling space with a minimum space of 10,000 sq. ft. and has 30 stores trading from over 50,000 sq. ft. of which 8 trade from over 70,000 sq. ft. Penneys sell low priced merchandise with their own brand names such as Atmosphere, Active, early days and Denim co. Target Market
Penneys targets its merchandise to women, men under the age of 35 and children. Its core market is young women with almost half the sales being in the women fashions department Situation Audit
* Market Attractiveness analysis
The retail market which employs 12% of the workforce in Ireland began to decline in 2008 due to a downturn in the economy worldwide. Unemployment levels within the Irish economy increased in 2008 by 1.9% from 2007 and consumer spending decreased. The current unemployment rate in Ireland is 14.2% meaning consumer spending continues to decrease. The National Consumer Agency in Ireland carried out a survey in February and found that 22% of those surveyed indicated that they intend to save more during 2011 this indicates consumers intend to spend less in the retail sector. Based on the year 2005 the value of sales in retail market in Ireland: 2008- Declined by 4.5%
2009- It declined by -18%
2010- It began to stabilise by declining by -2%
2011 – It is estimated to decline by -3.3%
In the clothing, footwear and textiles industry the annual percentage change based on 2005 in September 2011 was -4.9%.
These figures illustrate how retail Sales are continuing to fall making it difficult for retailers to continue to exist within the market .Although in recent years the market has become more predictable and retailers can now make plans for purchasing stock and other aspects of their business based on recent annual sales figures. Penneys have had increasing sales figures in the last few years due to the demand for low priced merchandise. In 2010 Primark had increased sales by 13% based on the 2009.
* Competitor Analysis
Two main competitors to Penneys in Ireland are Dunnes Stores and Heatons.
Dunnes is an Irish owned retailer which sells similar merchandise to Penneys excluding food, it has 155 stores including stores in England, Scotland and Spain. What makes Dunnes STORES a Competitor to Penneys?
* There is 116 Dunnes Stores in Ireland
* Similar target markets with their fashion items and homeware. * Pricing of merchandise aims to satisfy a low budget
* Location- Dunnes stores mainly locate on high streets and shopping centres which is similar to Penneys. * Own brand products such as Savida and St.Bernard
Dunnes Stores competitive advantagES
* Dunnes stores advertises “Better Value” which insinuates low prices but with better quality goods. * More locations in Ireland particularly shopping centres. * Grocery sector has 23.7% of Ireland’s market share in 2011 which means they have a large amount of potential customers to cross sell to their clothing section.
Penneys competitive advantages with Dunnes Stores
* Penneys have a low cost Global Supply chain they source their goods from China, India Bangladesh and Turkey. The goods are produced at low prices in these countries. They buy larger amounts of stock globally because they have more stores which mean that Penneys can sell the merchandise at very lower prices in their stores. * Penneys don’t need to advertise as much as they believe their products do the talking and customers advertise for them. * Fashionable up to date goods copied...