Case Study: Primark - Challenges in the Supply Chain

Case Study: Primark - Challenges in the Supply Chain.

(Case written by P. James)

Company Background

Primark is rapidly becoming a high street phenomena. "Primark is a retail group in the value sector and operates a total of 181 stores in Ireland (where it trades under the Penneys brand), Spain and the UK. Primark employs in excess of 25,000 people. In GB, in terms of market share, TNS ranks Primark as GB's second largest clothing retailer by volume... Since the year end, seven additional stores have opened in Spain; in Bilbao, Jerez, Oviedo, Zaragoza and three further stores in Madrid. Primark now has 25 stores trading from over 50,000 sq ft of which eight trade from over 70,000 sq ft. (Primark, 2008a)."

Part of their stated competitive edge comes from providing goods on the high street at low prices. As stated on their website, "Primark targets young, fashion-conscious under 35's, offering them high quality, fashion basics at value for money prices. Almost half of sales are in Womenswear. A quarter of sales is dedicated to Menswear and Childrenswear, with other items constituting the remaining sales. Buying and Merchandising teams in Reading and Dublin travel internationally to source and buy up-to-the-minute fashion basics that best reflect each season's key fashion trends. Primark's offer to the customer is one of high-quality merchandise, at value for money, backed by Primark's service promise. Primark prides itself on its loyal customer base (Primark, 2008a)." This is achievable through what Primark explains is "the result of technology, efficient distribution, supply and volume buying...and a clear focus on the target market (Primark, 2008a)."

Primark's Ethical Principles

Even though Primark have stated that part of the success comes from volume buying they still claim to put ethical principles to the fore. "Primark is a member of the Ethical Trading Initiative. This is an alliance of companies, trade unions and non profit organisations that aims to promote respect for the rights of people in factories and farms worldwide. As a member of ETI, Primark has committed to monitoring and progressively improving working conditions in the factories that supply Primark's merchandise (Primark, 2008a)."

Their Code of Conduct is wide ranging covering aspects of Human Resource Management, workers' rights and a promotion of ethical practice. It is clearly displayed in their website:

* "Employment is freely chosen

* Freedom of association and the right to collective bargaining are respected

* Working conditions are safe and hygienic