Primark's new 'supermarket tactic' to woo customers in online price war

Primark is adopting a 'supermarket tactic' by slashing prices on hundreds of clothing items, including jeans, jumpers, and socks, in a bid to win back customers amid intense online competition. Shoppers have noted that the fast-fashion giant's prices have increased, with one 19-year-old student remarking, "Primark isn't as cheap any more." This strategic price reduction aims to counter the aggressive low-cost strategies of online retailers like Shein and Temu.

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It's the kind of headline you'd expect from M&S or Next.

Retail analyst Natalie Berg explains that Primark is essentially using the same strategy as supermarkets, which attract customers with deeply discounted staple products like milk and bananas. By offering low-cost essentials, Primark hopes to draw shoppers back to its stores, mirroring the appeal of budget-friendly groceries. This move is particularly significant as Primark has been experiencing a drop in like-for-like sales, a key retail performance indicator.

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You don't want to join a race to the bottom. But when Shein is selling dresses for £3, you've got to respond, right?

The competitive landscape has "evolved dramatically," Berg notes, with Shein and Temu setting a new baseline for low prices. These online-only retailers can undercut traditional brick-and-mortar stores because they avoid the costs associated with physical locations and often benefit from import duty exemptions. Their efficient operating models also minimize unsold stock.

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Our business model and focus on buying at scale and keeping costs low

Primark's parent company, Associated British Foods, plans to spin off the business onto the London stock market next year, making this pricing strategy a crucial move. While Primark offers a click-and-collect service, it does not provide home delivery, a contrast to its online-only competitors. Some shoppers are also finding better value and quality in other high-street brands or opting for secondhand clothing, further intensifying the pressure on Primark to adjust its strategy.

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It's definitely got more expensive