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Poundland predicts new customers will remain loyal post-recession
Poundland believes the growing number of shoppers it is attracting in the recession will continue to frequent its stores after the recovery because they will have become hooked on the value it offers.
By Glynn Davis
This counters the argument that consumers will revert to their original choice of stores once they have more disposable income in their pockets. Speaking at the Marketing Society Retail Forum in London, Tim McDonnell, retail operations director at Poundland, told delegates: “T
These customers include a growing number from the AB grouping, which now accounts for 12 per cent of Poundland customers, following the 22 per cent increase on the previous year.
However, McDonnell suggests customer numbers were on the increase before the recession as they found its fixed-price £1 proposition tempting. Part of this is based on the unexpected nature of the experience with only 300 to 350 lines stocked on a permanent basis and the rest changing throughout the year. Around 7,000 SKUs will be available at some point during the course of the year.
Another point of differentiation is the unique own label products that are made specifically for Poundland and are sold under sub-brands dependent on the category. Its combination of products (all priced at £1) helps the business attract 11,000 customers per week to each of its stores, with as many as 20 per cent visiting more than once per week.
Its product mix helps it derive as much as 43 per cent of its sales from impulse purchases, which compares with only 18 per cent at the typical convenience store. But it not only sells own label as 800 products are well-known brands, which McDonnell says give the company “credibility” and is the “difference between us and the competition”.
Poundland has found it easier over the years to work with the major brands because they are increasingly attracted by the size of the business - which is set to hit 250 stores, helped by the plan to open as many as 50 new outlets this year. McDonnell says as many as 650 sites have been identified throughout the UK for further expansion.
And then there is the prospect of moving overseas: “There is an opportunity in Europe as there are some fixed-price retailers. So it does work.”
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