The Rise of Primark

Primark is an Irish clothing retailer that operates in nearly 10 countries, including Spain. It was founded in 1969, and, since then, its revenues have rocketed. In Spain, the first shop opened in 2006, and last year's profit increased by 36 % from the previous year, reaching a profit of 971 million euros. How is it possible that, being relatively new, a company like Primark can earn so much money?

1. Low operating costs

Primark offers clothes made of artificial materials, what reduces the expenditure of the production process. Moreover, economies of scale allow the company to realize volume purchases, reducing prices too.

2. Price for consumers

Some marketing analyzers agree that price is the most relevant factor that has contributed to the success of Primark. Primark has opted for a winning equation: "I buy something, I use it and I throw it. It's so cheap that it doesn't matter throwing it." The product is cheap but is not of bad quality, it is right because of the selling price. As I said on the previous paragraph, the fact that the company doesn't use expensive materials affect the price.

3. Low investment in advertising 

When it opened a new shop in Gran Via, Madrid, the brand promoted itself in a few occasions and just with informative messages. We could only see them on the nearer underground stations (Gran Via, Callao...). The absence of investment in advertising means saving in costs and an orientation to the "mouth-ear" as a platform to reach consumers. Social networks have also been important mediums of publicity in recent years.

4. Merchandising 

The cheapest products are usually located in the entrance of the store, and have a function as elements of "calling effect".

5. Expansion in recession period

The economic situation contributed to end with the belief that cheap clothes were bad.