Primark to cut 400 management roles, won't raise prices
Primark management is to pay the heavy price of countering rising costs with 400 retail bosses set to lose their jobs in the UK.
Despite reporting a return to strong sales over the Christmas period, the value fashion and lifestyle retailer is having to offset the high costs related to Covid and a squeezed supply chain.
The retailer, which operates 191 stores in the UK, said it was phasing out some store roles, including supervisors, and creating a new entry-level management role as part of a reorganisation.
Primark UK retail director Kari Rodgers said: “The changes we are proposing will deliver a simplified and more consistent management structure across all of our stores.”
She noted the shift in emphasis “will provide more opportunities for career progression and offer greater flexibility, all of which are designed to help us provide the best possible experience for both our customers and colleagues.
“We are now focused on supporting our colleagues who are affected by these proposed changes and will be going through the consultation process.”
John Bason, the finance director of Primark’s parent group, Associated British Foods, added the retailer was seeing cost increases on shipping, energy and commodities, but was not planning to put up clothing prices up. “Our customers know us for the best value around, and we’re going to stand by them on that,”he stressed.
He added that although supply chain pressures had now eased it still expected that longer shipping times would “continue for some time”.
But with costs associated with operating physical stores rising and Primark avoiding entering the e-commerce arena, Sam O’Brien, CMO of performance marketing platform Affise said there chain could be missing out on by not having a digital sales presence.
“Primark’s continuing insistence not to launch an e-commerce offering — despite taking an 11% hit on like-for-like sales — could be the start of the end for the beloved brand.
“The retailer has reported that sales performance at stores that remain open is varied, as less tourism and more people working remotely continues to hammer footfall within the brick and mortar stores.
“During the continued lockdown periods throughout the Covid-19 pandemic, an online e-commerce presence would have preserved significant amounts of lost revenues and potentially consumer advocacy. It would even have been a perfect opportunity for the chain to pilot an online store to limited regions.
He added: “If Primark continues to ignore online e-commerce, they could go the same way, despite their popularity.
Meanwhile, from March Primark said it will enable UK shoppers to check online if their local store has a particular item in stock. The system is set to be rolled out worldwide in the coming months.
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