Poundland is moving to more multi-price points with fewer products at £1, according to the chain’s managing director.
Barry Williams said the proportion of products at £1 was “gradually changing over time” and new price points would be considered wherever they could offer good value.
The variety discounter currently sells some products at £2 and £5, though the vast majority are still at the traditional £1.
“If something that is amazing value comes along and we think it’s right for our proposition and right for our customers and it’s £7, then we’ll have a go at it,” said Williams.
His comments came as Poundland reported like-for-like sales up 1.7% for the nine months to 30 June, though overall sales fell 5% to £1,2bn.
Parent company Pepkor Europe grew revenue by 8% to £2.1bn, with like-for-like sales up 3.7%.
Poundland’s fall in revenue was attributed to the closure in the comparative 2017 period of around 60 99p Stores – the chain Poundland bought in 2015 and then put into administration after converting the majority to its own fascia.
Like-for-like sales recovered through the third quarter after being initially affected in April by an early Easter.
Barry Williams, Poundland MD, on Toblerones and elves
The rollout of Pep&Co ‘shop-in-shops’ continued in the period, with 175 sites added. Like-for-likes of Poundland stores with a Pep&Co clothing outlet were up 7.7% in Q3.
“Poundland continues to make good strategic and operational progress to widen its appeal,” said Pepkor Europe CEO Andy Bond. “It’s extending the value it can offer through additional price points and the introduction of Pep&Co fashion ‘shop-in-shops’ is giving customers a distinctive reason to shop on the high street.
“Underpinned by the introduction of tighter retailing disciplines, Poundland is changing at a pace led by its customers, who are really embracing the difference.
“Both Pepco [Poundland’s central and eastern European sister company] and Poundland are working increasingly closely with PGS, our global sourcing arm, which is providing the ability to drive both businesses’ competitive position.
“Both retail businesses are cash generative, profitable and stable, with management teams encouraged by the strong operational progress we’re now making. This is already a significant business, serving between 35 and 40 million customers each month, and we are on track towards creating a European discount variety retailer with significant reach.”
Williams told The Grocer: “All I want to do is satisfy my customers and if I can take more share of their wallet with propositions at £2 and £5 then I’m going to do it.”
He said Poundland had benefited from the demise of competitors such as Poundworld. “Some of the challenges that our immediate competitors have experienced, we’re picking up a little bit of benefit of that,” he said.
“There’s definitely a tailwind of that supporting us. How much is difficult to measure at the moment.”
Customer confusion caused by too many price points was one of the criticisms levelled at Poundworld after its collapse into administration in June. Williams said confusion could be avoided by separating products and clearly marking their price.
“We will never mix a £1 bay with £2 or £5 products, so whenever you visit our stores, it’s very clear where a product isn’t £1,” he said.
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