Dive Brief:

• Irish apparel retailer Primark is selling apparel that on average is 202% below average U.S. apparel prices, according to results from a new Morgan Stanley pricing survey published this week, prompting the financial services firm to say that it could prove to be a “disruptive force in U.S. retail,” reports MarketWatch.

• Except for off-price retailers, J.C. Penney Co. outpriced Primark by 198% and and Target Corp. outpriced Primark by 154%. The biggest gaps were found at American Eagle Outfitters Inc., priced 360% higher than Primark and Gap, priced 332% higher. 

• Even Wal-Mart, which the survey found to be the least affected, had a 36% price premium over Primark, the survey found. The survey included 14 stores in the Boston area and 100 like items.

Dive Insight:

Primark, which opened its first U.S. store in Boston last year and plans to open eight more here this year, sells clothing so cheap that it can make Forever 21 or H&M look like mid-priced apparel stores.  

The retailer has arrived in the U.S. at a time when consumers are shifting their priorities away from apparel, putting their money into smartphones and travel — things that help them stay connected to friends and create memories. These trends could help drive customers to Primark, as they’ve flocked to fast fashion. The retailer has already made a name for itself for its fashion-forward styles, getting mentions (including high marks) in Vogue for some of its designs. 

But it could also encounter some resistance from an American shopper that is increasingly concerned about how clothes are sourced, from both environmental and a humanitarian standpoints. The company says its “committed to working toward a living wage” and has discontinued some of its worst environmental practices. 

Primark also says it wants to be another source of Americans’ clothes, and is not expecting to muscle anyone out of business. But, as Morgan Stanley notes, those huge price gaps could be disruptive to the discount retailers like Penney, Target, dollar stores, and even Wal-Mart, and perhaps especially to teen retailers like American Eagle.

“We think Primark’s similar offering but at even sharper price points could win over shoppers, particularly value-focused millennials,” Morgan Stanley wrote. 

In something of an anomaly in retail today, Primark has a website, but it's not shoppable. Its prices (and margins) are so low that it eschews e-commerce because it has no way of passing the cost of shipping or other logistics onto the consumer. This could be another mark against it as more retailers increasingly smooth out friction between channels.