Primark doubles down on US expansion despite tariff tensions
Primark’s commitment to expanding its footprint in the United States is unwavering, even as it navigates the turbulence of fluctuating tariffs and trade policies under President Trump’s administration.
Despite some uncertainty around the impact of ongoing tariff shifts, Primark’s leadership has reiterated its determination to proceed with plans to increase its U.S. store count significantly.
The global fashion retailer, owned by Associated British Foods (ABF), has already established a presence in the U.S. with 29 stores, contributing to 5% of its overall sales.
However, its sights are set much higher, with plans to expand to 60 stores by 2026. This ambitious growth strategy remains intact, even as the company faces the complex challenge of managing U.S. tariffs, which have fluctuated under the current administration.
The challenge is considerable. The U.S. market, historically a graveyard for some British retail giants like Marks & Spencer and Tesco, has been a challenging environment for many foreign retailers.
Yet, George Weston, ABF’s CEO, remains confident that Primark’s affordable fashion offering will continue to resonate with U.S. consumers.
Despite the headwinds caused by unpredictable tariff regimes, Weston believes that Primark’s business model—focused on high-value, low-cost offerings—remains suited to the evolving market dynamics.
“We are absolutely committed to our plan to have 60 stores in the U.S. by 2026,” Weston affirmed.
While Primark may face tariff-related challenges, the firm’s core value proposition—affordable pricing—remains an attractive proposition for American consumers, particularly those seeking value amid rising prices.
One of the significant challenges faced by Primark in the U.S. is the “de minimis” duty exemption, which allows goods under a certain price point to enter the U.S. duty-free.
The current tariff policies, including the elimination of this exemption, could increase costs for businesses reliant on this system, such as Chinese fast-fashion company Shein, which competes with Primark in the value clothing sector.
However, Weston noted that the ending of the de minimis exemption might shift the market dynamics in Primark’s favour.
“With prices going up from this part of the trade, I wonder if some Americans might start going back to shopping centres to find value there,” Weston suggested.
As U.S. consumers face higher costs on imported goods, Primark’s low-cost retail model could offer an attractive alternative, especially as the firm continues to expand its presence across key U.S. states.
Primark’s approach in the U.S. has largely focused on providing affordable fashion without sacrificing style or quality.
This value-driven model, which has worked well in other markets, positions Primark as an increasingly compelling option for U.S. shoppers, especially as the country grapples with the effects of trade policy on pricing.
Primark’s success in Europe and its steady performance in other global markets have bolstered its confidence in expanding further in the U.S.
By targeting value-conscious consumers, particularly those looking for affordable alternatives to more expensive fast-fashion options, Primark is carving out a niche in a market where many of its competitors have struggled to thrive.
Despite these encouraging developments, Primark remains cautious in its approach, taking time to evaluate the impact of trade policies before making more substantial moves.
As Weston explained, “We’ll take the [tariff] hits where we have to take them and before we take more substantive actions wait to see where we really are.”