Insight Flash: Leveraging CE UK & Europe Transaction Data to Assess H&M Market Share Against Top Competitors

H&M recently announced plans to close nearly a quarter of its stores in Spain as it re-evaluates its competitive position in the country – but what drove its retreat, and could other geographies be next? Using’s CE’s UK and EU transaction data, we assess H&M’s positioning and vulnerabilities against top competitors in five key European markets. 

The State of H&M in 2024

In late January, global fast-fashion giant H&M (ticker: HMB SS) announced its intention to shutter nearly one-quarter of its 133 stores in Spain and reduce its local workforce as it re-evaluates its competitive position in the country. The news was closely followed by a weaker-than-expected fourth quarter earnings report, additional layoffs, and the resignation of the company’s CEO. Using CE’s country-level European transaction data, we assess H&M’s market share and recent performance against top Fast Fashion competitors in key European countries to shed light on its recent stumbles and answer the question – is the situation in Spain uniquely challenging, or could a retreat from other markets be on the table?

Key Takeaways

  1. H&M’s CE panel spend growth in Spain significantly lagged that of top rivals and the Fast Fashion market as a whole from 2018 to 2023, likely contributing to its decision to downsize operations in the country.
  2. H&M has lost share in each of our five key European markets as it contends with both longtime competitor Inditex (ticker: ITX SM) and new entrant SHEIN, which now controls roughly 20% of Europe Fast Fashion spend.
  3. UK Cohort data indicates that H&M customers are increasingly interested in Zara, and that shared shoppers tend to spend less at H&M than at its rival.

H&M Pain in Spain

H&M’s struggles in the Spanish market are well attested by CE’s country-level transaction data. Squeezed between incumbent Inditex, with its home-field advantage and trendy offerings, and insurgent competitor Shein, which has muscled into the market with an agile digital-first approach, H&M saw sales in our Spain panel decline by over 25% from 2018 to 2023 (across all brands) despite Fast Fashion spend as a whole growing by 56% during the same period. H&M’s decline was driven by falling transaction volumes, as its average transaction size remained stable over that timeframe. The chart below showing CE panel spend growth by company over the past two years starkly illustrates H&M’s lagging performance, as it posted negative y/y growth in nearly every month over the past two years while Inditex kept pace with the broader Fast-Fashion industry aggregate and SHEIN logged consistent double-digit gains.

A Continental Contest: H&M Market Share

Spain is far from the only market where H&M has ceded ground to rivals. As shown in the market share chart below, the core H&M brand has also faced setbacks in France, Italy, the UK, and even Germany – a country where H&M held a dominant 36% share as recently as 2019 but is now even with Zara at 28%. That said, the situation in Spain appears to be the worst, with H&M maintaining double-digit share in the remaining countries – so the company may not be forced to scale back its operations in other geographies in the immediate future.

Zara has been a key beneficiary of H&M’s losses (picking up several percentage points in Germany, Spain, and the UK from 2019 to 2023) both companies have had to contend with formidable newcomer SHEIN, which has managed to claim a ~20% stake of European Fast Fashion spend despite being a virtual nonentity just four years ago. 

Crossing the (British) Aisles: Customer Cross-Shop Analysis

To better understand shifting customer preferences as H&M vies against Zara and SHEIN for share in a fiercely competitive market, it can be instructive to drill down beyond aggregated spend and into individuals’ shopping patterns. CE’s UK Cohort panel allows users to perform cross-shop analyses within the UK market to shed light on the overlap in shopper base between competitor brands and how the behavior of these shared shoppers has changed over time.

The cross-shop tool shows that Zara has made steady inroads with H&M’s UK shopper base, as 26% of individuals making a purchase at H&M in 2023Q4 also bought from Zara, up from 20% in 2019Q4 – however, the reverse hasn’t held true, as the percentage of Zara customers also shopping at H&M dropped by 3 points over the same timeframe.

Shared shoppers spend more at Zara (£134 in 2023Q4) than they do at H&M (£82). Taken together, these suggest that Zara has succeeded in positioning itself as an attractive substitute for H&M at a more premium price-point.

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About the Authors

Michael Gunther is the VP Head of Insights for the CEIC. Explore more of his insights here and follow him on LinkedIn.

Matthew Volpe is an Insights Analyst for the CEIC. Follow him on LinkedIn.