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News - 5 July 2008

The cost of bad press

They say all publicity is good but Primark may not be in wholehearted agreement with that statement right now. According to a poll commissioned by Drapers Primark could face losing 42% of its customers.

The new Primark opened in Brighton last year to a fanfare and a long queue of people prepared to wait as long as it took to grab a bargain. Recent allegations that the company has been using factories in India that employ children has sent reverberations through the industry and has had an impact on customers many of whom are now queuing up to protest.

The Drapers-ICM poll found that 42% of people who shop at Primark were now less likely or a lot less likely to shop at the retailer directly because of what they had heard in the news. Some 68% of them had heard about child labour allegations and 38% were aware of issues with suppliers in India.

This shift in loyalty has arisen despite Primark’s swift action to axe the offending factories from its supply chain and issue a statement on its ethical policy.

Primark works on very tight margins compared with most fashion retailers and so depends on high volume sales to maintain turnover and profits. So a loss of over 40% of its customers could be significantly damaging to the retailer.

However, there is often a discrepancy between what people say and what they do. In the Drapers survey only 3% of Primark shoppers said that ethical production was a key concern when buying goods while 46% of shoppers maintained that value for money was the most important factor. So Primark may not lose quite so many of its regular customers as a result of this bad press.


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