Will Global Retail Giants’ Big Bet on American Consumers Pay Off?


For a growing number of European and Asian fashion brands, America is the land of opportunity.

A host of international retail giants are aggressively expanding their US footprints, with combined plans to open hundreds of stores in dozens of states in the next few years, according to a BoF analysis. Spanish retailer Mango opened 42 stores in the US in 2024, and expects to add 20 more this year. Dublin-based Primark has opened 14 US stores in the last two years, and has signed 15 additional leases for locations across the country. Fast Retailing’s Uniqlo aims to reach 200 locations in the US and Canada by 2027, from 69 as of last year. Inditex’s Zara is midway through a two-year project to open at least 10 new stores and expand or relocate about 20 existing locations. Zara is also investing €1.8 billion expanding logistics capabilities in the US, the company said.

Investment in US retail comes even as some stalwart American names are retrenching. Department stores such as Macy’s and Nordstrom are losing customers as they flock to more affordable alternatives, such as off-price retailers. Macy’s and other traditional mall retailers like Express and Foot Locker all announced store closures last year as consumer behaviour shifts toward new ways — and places — for shopping.

As relative newcomers, international retailers have the luxury of being able to pick the most attractive cities and neighbourhoods for their stores, and aren’t burdened by locations in dying malls and economically depressed regions.

Both Mango and Primark see Southern states as particularly attractive, with Primark planning to open a number of stores in Texas and Mango eyeing the Sun Belt “for its next phase of growth, driven by insights from e-commerce,” the company said.

But the US represents more than a big, blank slate. The American economy has been a case study in the resilience of consumers as retail sales have crept up persistently despite challenging macroeconomic conditions. As economic recovery in China continues to stall, the US represents an even more compelling opportunity for growth.

“The size, scale, competitiveness, vibrancy and diversity of the [US] market represents an incredible opportunity,” Kevin Tulip, president of Primark US, told BoF. “Primark is not alone in viewing the market this way.”

A Resilient Market

In the years following the pandemic, the American consumer economy demonstrated its vitality as shoppers cashed their stimulus checks for new luxury handbags and party dresses. Even as inflation crept up and consumer sentiment took a hit, people continued to open their wallets — albeit, trading down for cheaper, more value-oriented products. Post-pandemic spending at clothing and accessories stores has inched up from revenge shopping highs in 2021 to $26.3 billion in November, up 2.6 percent year-over-year, according to US Census data. That’s compared to a 4.5 percent decrease for clothing, shoes and textile product sales in China over the same period, according to China’s Bureau of National Statistics.

Even so, penetrating the American market is not as easy as simply showing up (just ask Uniqlo, which has only recently seen its efforts gain traction after two decades of uneven results). One reason: US consumers may love to shop, but they have plenty of options, said Pablo Villasenin, director of business development for Miista, a shoe brand based in London and produced in Spain.

“The resilient American consumer is a bit of a myth,” said Villasenin. “The consumer is researching deeper before they buy an investment piece.”

Before opening its first American store in New York last summer, Miista spent years testing the water by hosting events and pop-ups in the city and inking wholesale accounts in the country. Even with the US being Miista’s biggest and fastest growing market, opening the store as an independent label was a risk, said Villasenin.

Before opening its first American store in New York last summer, Miista spent years testing the water by hosting events and pop-ups in the city. (Miista)

“The biggest challenge here is that we have to do a huge amount of storytelling around the [brand],” he said. “The customer is more discerning. It’s tougher to get that loyalty established.”

Foreign retailers must also weigh the risk they’ve misjudged the moment, said Michael Brown, partner and Americas retail leader at Kearney, a consultancy, pointing to mounting consumer debt levels.

“There might be a pullback now, a resting and cool-off period where the consumer is looking back at these four years and assessing their financial situation,” he said.

The Discerning Consumer

A differentiated value proposition may be the single most critical factor for global retailers looking to make inroads in the US today.

In addition to opening more Uniqlo stores, Fast Retailing last fall opened the first US flagship for GU, which targets young adults. As an affordable fashion retailer, GU has an advantage in reaching today’s value-oriented shoppers, the company told BoF.

“For the American consumer, as they are shopping, we are seeing more price-conscious [behavior] that puts GU in a place where we can be a destination for people who are looking for fashion but aware of how much they’re spending,” said Dawn Abotsi, US marketing manager at GU.

The diversity and nonmonolithic nature of the American market may be another obstacle, but it makes for an effective starting place for global expansion, Abotsi added. GU’s store in New York is its first location outside of Asia.

“That diversity lends us to be able to learn about what anyone in the US is looking for and be able to accelerate our global expansion as we look to open more stores in other countries,” she said.

For Miista, differentiation lies in the craftsmanship of its products and marketing the brand in novel ways, said Villasenin. For instance, Miista promotes its vertical supply chain on its website and touts a seven-month production process, which is longer than most shoemakers. To advertise its new store, the company organised a “rage room” performance art activation at the site, inviting ambassadors to smash up a simulated office space and customers to share their own sources of anger on a wall of post-it notes.

Zara, meanwhile, sees product expansion and a more enticing shopping experience as growth areas in the US, the company said. Its new flagship in Los Angeles’ Canoga Park neighbourhood includes more than 5,300 square feet of space dedicated to categories such as children’s apparel and lingerie, a recent Zara launch. New and expanded stores also feature investments in customer technology such as a fitting room reservation service, two-hour pickup for online orders and self-checkout.

A Measured Approach

Retailers such as Primark and Mango may seem extremely bullish on US retail expansion in recent years, but both giants have been in the market for a decade or more. They’ve used that time to learn about the market before ramping up their footprint.

After Primark opened its first cluster stores in the Northeast US after entering the market in 2015, for instance, it prioritised analysing the results from those locations ensure strategic expansion.

“We [had] enough of a cross section of stores, from a downtown location and regional mall to a super regional mall, and we would see the results across different store types,” Tulip said.

Inside Primark store
Dublin-based Primark has opened 14 US stores in the last two years, and has signed 15 additional leases for locations across the country. (MATTHEW DANDY Photography)

What the company learned was a formula for the optimal retail format in the US. At 30,000 to 35,000 square feet, Primark’s US leases tend to be smaller than their European counterparts, according to Tulip. The specific location of the store matters — including what its neighbouring tenants are in a mall — as does the layout of the parking lot, cash wrap and fitting rooms.

“This isn’t growth for growth’s sake,” said Tulip. “If the store site doesn’t fulfill our criteria, and it’s a strict criteria, we wouldn’t sign that deal.”

Primark also favours hiring local retail veterans to lead and manage its new stores, a move that allows each location to be customised based on regional preferences. For instance, Primark’s new Orlando store has a separate floor dedicated to licensed Disney products. Its first store in Texas, which opened in December, includes signage in Spanish — a tip from local employees.

“Because of the autonomy Primark gives to store teams, we were able to set that store up in a way that feels local,” Tulip added.



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