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Primark invest £90 million into Spanish expansion
Source: Mintel 02-12-2022

Spain 02-12-2022

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Primark is set to invest £90 million into a Spanish expansion, its second largest market after Great Britain. The retailer currently has 408 stores in 14 countries and will be opening 8 new stores in areas like Lanzarote, and the Spanish enclave of Melilla.

It plans to hire more than 1,000 staff over the next two years to support this expansion.

Mintel comment:

"The cost-of-living crisis in Spain is forcing many consumers to be more selective about their discretionary purchases and take a more cautious approach to spending on clothes. After a brief period of clothing deflation in the first half of 2022, prices have begun rising again and are likely to rise further, which will lead to some consumers switching to cheaper retailers. This should benefit low-cost clothing specialist Primark, which announced in November that prices will now stay fixed until next Autumn, despite rising input costs.

Spain is Primark’s second biggest market after the UK and is the joint second most popular in-store destination for buying clothes, according to Mintel’s Clothing Retailing – Spain, 2022 report with 34% of clothing shoppers having bought from Primark in the last 12 months. The store-only fashion retailer was hit hard by COVID-19 lockdowns in 2020, but since stores reopened customers have returned in large numbers and the retailer’s Spanish sales were up 2.7% year-on-year in the 12 months to September 2021, boosted by the opening of new stores.

Primark expects to post a significant improvement in Spanish sales for the 12 months to end of September 2022 on the back of a surge in sales over the past six months as cash-strapped consumers become increasingly price conscious. The lifting of the state of alarm and all pandemic-related restrictions, including compulsory wearing of face masks in shops, has prompted a return to in-store clothes shopping, with the percentage of Spanish clothing buyers purchasing online falling faster than in-store. With this in mind, the brand is firmly committed to expanding its physical presence in Spain."