According to the report Primark has consolidated its position following total sales over the Christmas period, including new store openings, of 18%.
However, the report said the grocers are unlikely to give up any share of the market without a fight. Sainsbury's in particular has been intensifying its activity in the market.
The report, titled UK Value Clothing Retailers in 2008, also found that childrenswear was the main growth area.
It also aid that brands need to communicate their ethical credentials more effectively to continue market growth.