UK value retailer Poundland is continuing to expand with the acquisition of eight ex-Woolworths stores. And it is in discussions with landlords to buy many more shops in the collapsed high street chain.
Chief executive Jim McCarthy told Global Convenience Store Focus: “Woolworths has created a gap, sadly because I think a healthy and vibrant high street is a better place. But Woolworths absolutely fits our location criteria – there is a big sales opportunity and the stores are attractive.
“When recovery comes Poundland will do even better than we are doing now and we are doing well,” he said.
Jim McCarthy: expansion plans
Poundland currently operates 208 stores having opened 40 new outlets in the last year. McCarthy said he was aiming to exceed last year’s acquisition numbers and there is potential for 600-650 stores.
“So we are only a third of the way down the track. There’s plenty more to go for and we will try to get there as quickly as we can,” he said.
Poundland stocks approximately 3,000 skus across 16 categories, including food and drink where it competes in the key impulse areas of confectionery, snacks and soft drinks. In this department, it also features pick and mix multi-buys for £1.00 across key brands.
It has recently extended its grocery range with 60 new skus featuring essentials such as eggs, milk and sugar. New lines include pasta, tinned meat and cereals plus a 100g jar of Classic Roast Maxwell House coffee retailing for £1.00.
“That’s amazing value,” said McCarthy, “and we expect to sell seven figures’ worth of volume.”
Whitworths sugar is another top-selling line, he added. Poundland is selling an exclusive 1.5kg bag for £1.00, equivalent to 67p per kg versus 90p+ elsewhere. McCarthy said he expected to sell 5,000-6,000 tonnes in the calendar year.
“We have recognised that in recession, staples are really important,” he said. “Consumers are seeking value, particularly on life support products so we are experiencing strong growth on food and drink.”
McCarthy said Poundland is recording double digit growth in like-for-like food and drink sales. Across the board, the retailer is reporting 4% like-for-like volume increases.
“We are trading strongly, attracting larger numbers of customers and they are spending more,” he said.
Poundland: expanding grocery offer
McCarthy insisted Poundland would remain a general merchandise retailer, however. New lines of bespoke greetings cards, Coley & Gill candles and stationery including wedding cake gift boxes are reported to be selling well too.
“We are very much aware of our roots as a general merchandise retailer but recognise the changing needs of customers to seek value on food and drink,” he said.
McCarthy will be presenting Poundland’s strategy, goals and values and the convenience aspects of the business at the Insight NACS Future of International Convenience Retailing 2009 event, 14-17 September in London.
For further details visit our site: “People think [Poundland] is a good business in recession but it is even better when times are good,” he said. “Fifty per cent of all shopping missions are still on the high street, so bring them on.”