99p stores never had quite the same pedigree as Poundland so when the latter bought its cheaper-priced rival it was always going to be a tough task to bring things up to the required retailing standards.
One of the achievements of the present management – led by the outgoing CEO Jim McCarthy – has been the raising of the operational standards at Poundland, which has brought them to best-in-class levels to enable it to compete effectively with the supermarkets and other tier-one retailers.
The disciplines and systems in place at Poundland (and the other fixed price retailers) was not exactly great but significant work has been undertaken to make the leader of this price-driven pack a major force in the market.
The effort to bring the 99p store estate up to scratch along with some other broader competitive issues has buffeted Poundland in recent months. This should not be seen as the end of the growth story at the company. It would certainly be unfortunate if the achievements and reputation of McCarthy was in any was negatively impacted by these present day challenges facing the business.
Arguably the company could be on the cusp of a new period of growth following the opening of its first multi-price store – ‘Poundland & More’ – which represents a major departure by the company. With items priced at up to £150 this is some way removed from the ‘Everything for a £1’ heartland of the company.
But to stick rigidly to the constraints of £1 would potentially be limiting because it is clear that great success is being enjoyed by the likes of B&M, Home Bargains and The Range, which have the flexibility to offer goods at all price-points.
Such is the decent reputation of Poundland in the market for dealing fairly with suppliers that it must be painful for it to have to turn away opportunities because of the limitations of having a pricing ceiling of a mere £1.
Poundland & More could be the initiative that opens up great new avenues of growth for the company and gives McCarthy a worthy parting shot that sits well with what he has achieved at Poundland and the various other retailers that have benefited from his skills and integrity.
Glynn Davis, editor, Retail Insider
K3 Retail deliver multi-channel solutions that enable retailers to create joined up shopping experiences for their customers whether they choose to buy on-line, direct, in-store or via mobile. It has over 20 years’ experience delivering award winning solutions, to more than 175 internationally recognised retail brands.