Willenhall-based Poundland to open more stores
Jun 3 2009 by Anna Blackaby, Birmingham Post
Bargain-hunting shoppers helped profits surge at Willenhall-based Poundland as the firm said it was ploughing ahead with a string of new store openings – many in former Woolworths stores.
The discount retailer – which sells everything for £1 – said profits were up by 47 per cent last year with like-for-like sales up 2.1 per cent in the year to March 29. Operating profits rose to £11.8 million from £8 million the previous year.
Poundland opened 41 new stores in the 12-month period and said it planned to continue at a similar rate, with the total estate forecast to reach 250 outlets this year, creating 1,200 jobs.
The firm has recently opened several new stores on the sites of former Woolworths outlets – including Kings Heath in Birmingham and last weekend in Stratford – employing 150 former Woolworths staff. Out of the staff taken on at the Poundland store in Kings Heath, 24 are former Woolworths employees.
Poundland chief executive Jim McCarthy said value-seeking behaviour among shoppers had helped the company post the robust set of results.
“I think it’s that value is high up on the agenda of most customers and that applies to all customers, not whether they are economically challenged or whether they have more disposable income.
“Everybody is looking for a bargain and the certainty of the Poundland proposition – where everything is £1 - provides security so you can budget very effectively.”
Mr McCarthy said the store had seen a 22 per cent increase in customers from the AB socio-economic group, meaning that 11 in every 100 customers are higher earners than its traditional customer base.
“That really reflects the savvy shopping that is going on,” he said.
“Also there has been a movement to everyday essentials such as food and drink and health and beauty. We are very strong on that and that’s been very effective in bringing people in.”
Mr McCarthy was also confident that the firm would be able to continue to deliver growth when the economy recovers.
“Customer shopping behaviour will still seek value so Poundland is going to take advantage of that.”
“I think a lot of people will get used to paying less and retailers have to face up to the fact they have to got to provide value. The playing field is changing.”
“There is a popular misconception that Poundland is a great business during a recession and not such a great business during good times.
“We’ve been in business for 19 years and this is the second recession we have been through.”
