Primark
Q) Primark, one of the UK’s most popular retailers of budget clothing, has been rated the country’s “least ethical retailer”. With reference to Primark or any business you have studied, to what extent does a company’s ethical stance determines its long term success?
= In recent years, changes in consumer concerns have led many firms to consider the ethical behaviour. Not everyone agrees on what’s ethical, but opinions differ on whether it is unethical or not. Primark has been considered as the “least ethical retailer” because of taking advantage of the developing countries economy. The ethical issues they faced were employing child labour, poor wages hardly covering the living standards, unhygienic and unsafe workplace and illegal immigrants working in their UK retailers. They faced problems due to ethical issues which were loss of customers due to bad image and customers protesting outside their shops which could be threat to their profit margin.
Primark has been a very successful; they have many shops within the country which leaves them in a good position in high street market. The high street market is growing twice the rate of clothing market than before. But this is a very competitive market as other competitors such as Asda, Tesco, and Sainsbury are trying to produce products as cheap as possible. BBC has apologised to Primark on blaming them for child labouring but in this case it was not them it was their suppliers who sub-contracted without permission so they have taken some action and cancelled the contract with them. This affects their profit as the new suppliers may charge more than the previous one but at the same time this will build up their reputation because of the good quality material. Their profit increased by 10% in 2010 and was able to make operating profit of £122m in 6 months on opening in Oxford Street despite the raised ethical issues. Primark has started to state their ethical stance towards the environment, workforce and suppliers.
= In recent years, changes in consumer concerns have led many firms to consider the ethical behaviour. Not everyone agrees on what’s ethical, but opinions differ on whether it is unethical or not. Primark has been considered as the “least ethical retailer” because of taking advantage of the developing countries economy. The ethical issues they faced were employing child labour, poor wages hardly covering the living standards, unhygienic and unsafe workplace and illegal immigrants working in their UK retailers. They faced problems due to ethical issues which were loss of customers due to bad image and customers protesting outside their shops which could be threat to their profit margin.
Primark has been a very successful; they have many shops within the country which leaves them in a good position in high street market. The high street market is growing twice the rate of clothing market than before. But this is a very competitive market as other competitors such as Asda, Tesco, and Sainsbury are trying to produce products as cheap as possible. BBC has apologised to Primark on blaming them for child labouring but in this case it was not them it was their suppliers who sub-contracted without permission so they have taken some action and cancelled the contract with them. This affects their profit as the new suppliers may charge more than the previous one but at the same time this will build up their reputation because of the good quality material. Their profit increased by 10% in 2010 and was able to make operating profit of £122m in 6 months on opening in Oxford Street despite the raised ethical issues. Primark has started to state their ethical stance towards the environment, workforce and suppliers.