If you can't beat 'em, don't join 'em...

primark.jpgBudget brands are booming. It’s simple to understand why: if you’ve fewer pounds in your pocket you look to make them go further.Primark recently announced a 25% rise in half-year profits to £899m, making it the UK’s second most popular clothes retailer with one in every £10 spent on its budget ranges.Commentators are speculating it’s only matter of time before Primark usurps Marks & Spencer for top position. Across the pond, April sales figures for budget retailers Wal-Mart and Costco were up year-on-year, in stark contrast to the overall decline in consumer spending.Assuming the trend continues, what will it mean for those retailers that can't compete with Primark prices?Premium niche brands have swelled in more affluent stable economic times, but will be looking nervously over their shoulders wondering how far the premium pound will stretch.Likewise, a back-to-basics, money-counts mentality will pose the first real challenge to the growth in ethical and green trading. Is there a breaking point where price defeats ethics?On the flipside, retailers which have firmly differentiated themselves and established loyal customer bases could actually be more secure than mid-range mainstream retailers most likely to see customers jump one way or the other.Tatler editor Jane Procter puts it brilliantly: "It's either Prada or Primark. I don't see the point of shopping anywhere in between."The danger is companies whose models can't support budget prices try to compete where they can't. If that's you, sticking to your guns (and USPs) could be the smarter move.Image: flickr

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