Poundland
Encyclopedia
Poundland is a British
-based variety store chain which sells every item in its stores for £1
. Established in April 1990 by Dave Dodd and Stephen Smith, Poundland stock a variety of around 3,000 home and kitchen-ware, gifts, healthcare and other products, across 16 categories many of which are brand name and clearance products
. Like many of its rivals, Poundland operates a constantly rotating product line with products sold at the single price point of just £1. Although price-point retailing was invented in the United States
during the 1870s, the chain claims to have introduced this concept to Europe
and is the largest single-price discount retailer in Europe. The retailer claims that their Croydon
store is the busiest single-priced discount outlet in the world, generating more than £9 million in revenue per year with 30,000 customers a week, which as of December 2008, was more than any of its yen and dollar
counterparts in Japan
and the USA respectively. The company estimates it serves 2.75 million customers in an average week.
Poundland have enjoyed strong sales
growth and have maintained steady profit
growth against increasing inflation
. This, among other factors, has been aided by a strong customer base of predominantly female shoppers every week in the C1, C2, D and E
categories (the working classes in a system of demographic classification
used in the United Kingdom
). The chain employs 7,000 staff and their company union is the Union of Shop, Distributive and Allied Workers (USDAW). Their closest rival in the market is 99p Stores
, who undercut Poundland's prices by a penny.
It was announced in September 2008 that Poundland's owners, Advent International
, are said to be cashing in on the resurgence in value retailers by preparing to put the chain up for sale. The report came as figures shown that value retailers are seeing a business boom in the current economic climate. These plans were confirmed in March 2010, when it was reported that Barclays Private Equity
has expressed an interest in a potential take-over of Poundland for about £200 million. On Tuesday 4 May 2010, it was announced that Poundland had been sold to US private equity firm Warburg Pincus
for £200 million.
of just £50,000.
The first pilot store
opened in December 1990 in the Octagon Centre, Burton upon Trent
, after countless turndowns by big landlord
s who had reservations about allowing such a store to operate, given they could easily undercut every retailer in sight. It was soon followed by other stores, most notably on The High Street, Meadowhall. Growth continued throughout the early 1990s, with six stores by December 1991 and a further seven a year later. In 1995, Smith failed to plan for more warehouse
space, and retail growth pushed their storage capacity past its limits. In the same year, stock theft
reached an unacceptable high. In response, a new 130000 square feet (12,077.4 m²) warehouse was built, although at a cost of heavy profit losses, from £850,000 in 1994, to £400,000 in 1995. The retailer managed to resolve their operational difficulties throughout 1996 when their new warehouse site became fully operational.
, with its 150th store opening in Northampton
in mid-2006 and a gross turnover of £311 million in 2007, up from £281m the previous year. Following a management buy-out in 2002, the company has continued to grow with annual profit growth of 23.44% (2007) and aims to continue its store expansion by 30 a year into 2009, overseen by James McCarthy. Chairman Colin Smith, speaking in April 2005 as Poundland revealed it had invested £20–25 million in building a 300000 square feet (27,870.9 m²) distribution centre, said there was great scope for further growth, saying "We can clearly conceive this chain having 400-plus stores in future".
Poundland operate a recycling
initiative through which they will give money for old mobile phone
s, while at the same time making charitable
contributions and helping the environment.
, where it is believed high rental costs were one of the reasons why the company pulled out of the area. Although the chain has seen their strongest growth and sales during the recession, CEO Jim McCarthy notes that there is a common misconception that Poundland is a better business in a recession, when actually they're better during normal economic conditions, but are very robust to manage well despite the state of the economy.
When the rate of VAT
was reduced in November 2008 to 15%, Poundland's prices remained fixed at £1, by reason that they have kept the same single price point of £1 for 18 years and during that time have always absorbed duty and increased supplier costs without raising its price point. Chief executive Jim McCarthy said the chain will pass the savings on to customers in other ways.
With difficult economic conditions continuing into 2009, the supermarket retailer Asda
announced in January 2009 that they would cut the price of many of their branded products such as Colgate toothpaste to just £1, in competition with Poundland who are offering the same branded products at the £1 price point. In response, Poundland introduced multi-buy offers to provide a larger quantity of the products for the same price of £1. The announcement comes after reports show that value retailers are seeing their sales and profits boom during the credit crunch, with value-conscious customers making the switch from traditional larger supermarket retailers for their everyday necessities. The retailer had a good start into 2010 when they announced they had seen a surge in sales by nearly 35% over the 2009-2010 festive period.
Reports emerged in September 2008 that Poundland's owners, Advent International
, were to put the retail chain up for sale, with figures showing that value retailers are seeing business boom in the current economic climate. These plans were confirmed in March 2010, when it was reported that Barclays Private Equity
has expressed an interest in a potential take-over of Poundland for about £200m, although given that Poundland is on track to increase its turnover and profit in the 2009-2010 financial year, a higher price tag is possible. Advent originally bought Poundland in 2002 for £50 million and are reported to have hired Close Brothers to advise on its strategic options.
worth £47.5m for 78% of the company, where he received £304,000, making him worth some £25 million at that time. The sale allowed for the company's accelerated growth, expanding the store portfolio to well over 150 throughout the UK and creating an additional 500 jobs. He became chief executive with a 12% share in the business, and brought in Colin Smith as chairman, former chief executive of Safeway
.
James McCarthy took over from Dave Dodd as chief executive of the value retailer in September 2006. He joined Poundland having been lured away as managing director at Sainsbury's, with the offer of an "attractive equity incentive" that he will be able to cash in when the group's US owner, Advent International, sells out.
announced in March 2008 that it won a new three year contract worth £9 million with Poundland for transporting and supplying stock. DHL will be importing consumer products from overseas countries such as China
, to transport them to Poundland stores throughout the UK. DHL will transport a variety of products for Poundland from UK outbases in Billingham, Hatfield and Bellshill.
prices exceeding £1. Upon joining Poundland as CEO, McCarthy had plans to expand the price offering and increase the margin, envisaging a £2 section, a 50p section, a discount zone, and so forth. Upon visiting America to see how the discount stores over there did it, the overwhelming message was not to change the single price as customers understand it. The retailer is able to dismiss concerns whenever the pound becomes weak, as this means shipping and freight costs also reduce, which counteract the impact of a weaker pound.
Since November 2003, all of Poundland's stores have been using an advanced point of sale
solution, developed in-house running on Epson's touchscreen
Intelligent Registers (IRs). The primary purpose is to track and understand which products customers are buying, allowing for up-to-date tracking of the most popular products, helping to ensure constant stock via automated ordering. Their PoS system is set to improve further, with trials underway of contactless payment
s in two of their London stores for payments of £10 or less to make purchasing goods even quicker. The technology was introduced in 2007, but few retailers have so far announced full roll-outs of it.
Plans to launch a transactional
web site before the end of 2009 were under consideration during 2008-2009, in an effort to attract consumers not served by any of its stores. The proposed site would offer a limited range of products with best-sellers and seasonal items featuring strongly, such as Halloween
and Christmas
products. Poundland ran a similar trial
scheme during the early 2000s, with an average transaction value of £25. However, CEO James McCarthy said he had decided to postpone plans for transactional web site indefinitely, to concentrate on opening new stores.
Until recently, all unbranded products stocked by Poundland, which account for roughly 70% of total stock, would carry the Poundland branding and logo. However, the retailer has been able to increase sales by removing the Poundland brand
ing and creating around 50 sub-brands, such as Beauty Nation, Kitchen Corner and Toolbox for its value line of DIY products. In total, the retailer stocks 1000 branded products, the majority being food and drink, and more recently have introduced eggs to eight of its stores as part of a trial, which the retailer believes is likely to be a "top 20 volume seller". In 2003, The Grocer reported that approximately 400 of the chain's 2000 stock-keeping units (SKUs) are in impulse and grocery lines. Food products now account for 14 per cent of store space and 28 per cent of revenue, with 55% of its customers purchasing food or drink, particularly taking advantage of their multibuy offers such as four-for-£1 deals on branded crisps, confectionery
and soft drink
s.
In October 2009, Poundland launched their own range of bagged sweets branded "Sweet Heaven", in a bid to help fill a gap left in the high street by the demise of Woolworths. The range will include a number of favourites that used to be found in the Woolworths' Pick n Mix selection. As well as their own brand
line of products, the retailer also sells hundreds of products from other top brands such as Colgate
, Walkers
and Cadburys to name a few. Poundland are officially Britain's largest seller of batteries
, stocking reputable brands such as Sony
, Panasonic
and Kodak in quantities priced more competitively than their closest rivals, with the Kodak value pack being one of their best sellers and only exclusive to Poundland. Some of the products offered by Poundland which carry their branding are in fact supplied by manufacturers who are fussier about the retail positioning of their products and would rather allow their products to sell without their own branding attached. Poundland often sell large quantities of their stock to other retailers off-the-shelf, where it is cheaper for these retailers to pay £1 each for a bulk purchase than it would be to pay a discount
ed bulk-purchase rate elsewhere.
In 2007, Chief Executive Jim McCarthy said that the retailer would consider expanding operations into Europe
and the far east
once it has extended its UK portfolio to 650 stores. The retailer reached their first milestone in May 2004 with their 100th store opening in Merry Hill Shopping Centre
, Dudley
, and on 27 November 2008, Coronation Street
actor Anthony Cotton opened Poundland's 200th store at the Frenchgate Centre in Doncaster
,. The retailer expanded into Northern Ireland
and had opened 6 stores there before Christmas
2009, selling locally-sourced goods such as milk as well as the usual branded products. The company also celebrated a milestone when their 250th store opening on 21 November 2009, ahead of schedule and had planned for another 17 before Christmas 2009. The retailer is set to invest around £10 million to open at least another 50 stores in the 2010-2011 financial year.
The name ‘Euro
land’ is not going to be used so it will avoid the impact of price volatility in the region and as potential customers did not like the name.
Instead of everything being the same price, like the current Poundland model, there will be different prices.
As well as offering the Poundland mix of big brands such as Kelloggs, Cadbury’s, Maxwell House, Pantene and Kodak, the stores will also sell locally sourced products including milk, eggs and crisps.
, with roughly 2.75 million predominantly female shoppers (who account for roughly 80% of the customer base) every week in the C1, C2, D and E
categories. However, it claims 10% of its customers are in the A/B group, with the retailer seeing a 22% rise in the number of shoppers in this group over the 2007/2008 period. Poundland also attract students and the elderly who typically watch their budgets and look for bargain
s.
The retailer has been keen in recent years to move away from their reputation
of only appealing to low-income households, as they continue to expand into mainstream shopping centres and districts, with an increasing number of higher earning consumers in the market for a bargain. Poundland's ability to fight inflation
by guaranteeing their prices will remain consistent is just one factor in their appeal to a larger customer base.
An increasing number of households are seeing Poundland as a means to purchase their regular household necessities at a time of financial struggle. Where some high street shops have reported a downturn in profit
s, Poundland, a member of the bargain shop retail sector, have seen strong growth attributed to rapid price inflation
of many of the household necessities, with an increasing number of hard-pressed customers visiting its stores for bargains, bulk buying items such as toothpaste
and tinned food.
Value and discount retailers have seen a boom in sales since the recession at the start of 2009, with several retailers operating with the same strategy as Poundland, such as independent business
es and smaller price-point retail chains such as Poundworld. Poundland's closest and largest rival in the sector is 99p Stores
, whose buying director Faisal Lalani cited one of their main aims being to catch up with Poundland and their 223 stores as of August 2009.
Other larger chains have also been hit by the success of discount retailers, with many budget-conscious customers making the switch from traditional larger supermarket retailers for their everyday necessities. A strategy adopted by Poundland to lure customers away from the larger supermarket chains is to give them confidence with reputable household brands, then bring them in en-masse by selling those names at prices that defy and undercut almost any competition
, at which point try to entice the 40% to impulse
buy other products on offer, hopefully own-brand
, that they may not necessarily have planned to purchase. In response to this trend, supermarket retailer Asda
announced in January 2009 that they would cut the price of many of their branded products such as Colgate
toothpaste to just £1, in competition with Poundland who are offering the same branded products at the £1 price point. In an effort to stifle the competition, Poundland introduced multi-buy offers to provide a larger quantity of the products for the same price of £1 to avoid deterring this lucrative band of customers back to Poundland's larger competitors. However, research conducted by The Grocer
magazine in August 2009 found that of the 1300-odd supposedly discounted products on sale in ASDA during July 2009, a third were the same price as in March 2008 and 173 products had been selling for less than £1 during Spring 2009, while prices at Poundland have remained fixed since the chain was founded in 1990.
Whilst Poundland's competition will primarily be other value retailers, the retailer may sometimes find they are competing with other retailers' own brand produce. It was reported in May 2010 that Poundland were selling rebranded lotions for £1, exactly the same products that Boots
were selling under their own brand for significantly more. Boots responded to the findings by suggesting that the products available in Poundland stores were likely excess stock they had sold off below cost price which had been destined for overseas markets, with some inadvertently directed into UK distribution without their permission.
chains, as the price consistency across all product ranges in Poundland creates customer perception of a bargain. For example, two reporters from the Daily Mirror newspaper in November 2009 compared prices for branded products offered at Poundland with the same products offered at larger supermarket stores and found in some cases the larger supermarket stores offered better value for money.
Reviewers tend to speak positively about the store on many online review sites, but some tend to criticize poor store layout, design and overcrowding, as well as inadequate customer service
and staff knowledge. Despite this, in a survey the retailer conducted in July 2007, 99% of respondents said they would recommend the chain.
, rather than sourcing them locally. Despite Poundland being close to the Nestle
Rowntree's
factory in York
, which has made the mint since 1948, Poundland insists it is cheaper for them to source the product
from overseas, even taking in to account transport costs, to ensure it can continue to provide its customers with value for money. It later emerged that the mints were transported by ship, not by air, so the environmental objections were less valid.
witch hats, as checks on the item revealed a small number of chemicals classified as unsafe for young children.
Aside from potentially unsafe products, Poundland has also been found guilty of blocking fire exits at a cost to the company of £3000, as well as also being fined £13,000 in 2005 for unsafe racking in its warehouse.
In October 2009, the newspaper Newbury Today reported that customers who purchase a miniature keyring knife from Poundland stores are breaking the law as soon as they leave the store. The blade looks like a Stanley-style knife and the law states this makes it illegal to possess in public unless it is for work or religious reasons. The retailer had been highlighted about the problem previously, however continued to sell the item, despite some customers ending up in court and being prosecuted for possession of the item. Poundland spokeswoman Emma Broomhall said these had now been withdrawn from sale in Newbury and across all its stores, however did not address the claim that its customers had been liable for prosecution once they left the store.
in the autumn of 2011, Poundland posted a comment on their Facebook and Twitter social media stating "Poundland is not against colleagues wearing a poppy; however, colleagues are not allowed to wear one on the shop-floor simply as it does not abide by the uniform rules." .
This policy attracted much attention through social media including Facebook and Twitter, and various customer forums.
Poundland backed down from the ban on 31 October 2011,and released the statement that employees will be allowed to "use their own discretion in wearing poppies" after hundreds of customers threatened to boycott the store.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
-based variety store chain which sells every item in its stores for £1
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
. Established in April 1990 by Dave Dodd and Stephen Smith, Poundland stock a variety of around 3,000 home and kitchen-ware, gifts, healthcare and other products, across 16 categories many of which are brand name and clearance products
Closeout
A closeout or clearance is the final sale of an item or items to zero inventory. It may be a given model of item that is not selling well, or in the case of the final closure of a retailer because of a relocation, a fire , or especially because of a bankruptcy. In the latter case, it is usually...
. Like many of its rivals, Poundland operates a constantly rotating product line with products sold at the single price point of just £1. Although price-point retailing was invented in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
during the 1870s, the chain claims to have introduced this concept to Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
and is the largest single-price discount retailer in Europe. The retailer claims that their Croydon
Croydon
Croydon is a town in South London, England, located within the London Borough of Croydon to which it gives its name. It is situated south of Charing Cross...
store is the busiest single-priced discount outlet in the world, generating more than £9 million in revenue per year with 30,000 customers a week, which as of December 2008, was more than any of its yen and dollar
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
counterparts in Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
and the USA respectively. The company estimates it serves 2.75 million customers in an average week.
Poundland have enjoyed strong sales
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
growth and have maintained steady profit
Profit (economics)
In economics, the term profit has two related but distinct meanings. Normal profit represents the total opportunity costs of a venture to an entrepreneur or investor, whilst economic profit In economics, the term profit has two related but distinct meanings. Normal profit represents the total...
growth against increasing inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
. This, among other factors, has been aided by a strong customer base of predominantly female shoppers every week in the C1, C2, D and E
NRS social grade
The NRS social grades are a system of demographic classification used in the United Kingdom. They were originally developed by the National Readership Survey in order to classify readers, but are now used by many other organisations for wider applications and have become a standard for market...
categories (the working classes in a system of demographic classification
Demography
Demography is the statistical study of human population. It can be a very general science that can be applied to any kind of dynamic human population, that is, one that changes over time or space...
used in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
). The chain employs 7,000 staff and their company union is the Union of Shop, Distributive and Allied Workers (USDAW). Their closest rival in the market is 99p Stores
99p Stores
99p Stores Ltd is a family run business founded in January 2001 by entrepreneur Nadir Lalani, who opened the first store in the chain in Holloway, London, with a further three stores opening later that year...
, who undercut Poundland's prices by a penny.
It was announced in September 2008 that Poundland's owners, Advent International
Advent International
Advent International is a global private equity firm focused on buyouts of middle market growth companies in Western and Central Europe, North America, Latin America and Asia...
, are said to be cashing in on the resurgence in value retailers by preparing to put the chain up for sale. The report came as figures shown that value retailers are seeing a business boom in the current economic climate. These plans were confirmed in March 2010, when it was reported that Barclays Private Equity
Barclays Private Equity
Barclays Private Equity is the Private Equity division of Barclays Capital, the Investment Banking arm of Barclays plc. BPE have seven offices across four countries. Started in 1982 they have invested in over 350 businesses including Admiral Group and Dial-a-Phone. Typically €500m is invested per...
has expressed an interest in a potential take-over of Poundland for about £200 million. On Tuesday 4 May 2010, it was announced that Poundland had been sold to US private equity firm Warburg Pincus
Warburg Pincus
Warburg Pincus, LLC is an American private equity firm with offices in the United States, Europe, Brazil and Asia. It has been a private equity investor since 1966...
for £200 million.
History
Formation
Claiming to have introduced the concept of single-price retailing, Dave Dodd and Stephen Smith founded the retail chain in April 1990 with a starting capitalFinancial capital
Financial capital can refer to money used by entrepreneurs and businesses to buy what they need to make their products or provide their services or to that sector of the economy based on its operation, i.e. retail, corporate, investment banking, etc....
of just £50,000.
The first pilot store
Pilot (experiment)
A pilot experiment, also called a pilot study, is a small scale preliminary study conducted in order to evaluate feasibility, time, cost, adverse events, and effect size in an attempt to predict an appropriate sample size and improve upon the study design prior to performance of a full-scale...
opened in December 1990 in the Octagon Centre, Burton upon Trent
Burton upon Trent
Burton upon Trent, also known as Burton-on-Trent or simply Burton, is a town straddling the River Trent in the east of Staffordshire, England. Its associated adjective is "Burtonian"....
, after countless turndowns by big landlord
Landlord
A landlord is the owner of a house, apartment, condominium, or real estate which is rented or leased to an individual or business, who is called a tenant . When a juristic person is in this position, the term landlord is used. Other terms include lessor and owner...
s who had reservations about allowing such a store to operate, given they could easily undercut every retailer in sight. It was soon followed by other stores, most notably on The High Street, Meadowhall. Growth continued throughout the early 1990s, with six stores by December 1991 and a further seven a year later. In 1995, Smith failed to plan for more warehouse
Warehouse
A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities and towns. They usually have loading docks to load and unload...
space, and retail growth pushed their storage capacity past its limits. In the same year, stock theft
Theft
In common usage, theft is the illegal taking of another person's property without that person's permission or consent. The word is also used as an informal shorthand term for some crimes against property, such as burglary, embezzlement, larceny, looting, robbery, shoplifting and fraud...
reached an unacceptable high. In response, a new 130000 square feet (12,077.4 m²) warehouse was built, although at a cost of heavy profit losses, from £850,000 in 1994, to £400,000 in 1995. The retailer managed to resolve their operational difficulties throughout 1996 when their new warehouse site became fully operational.
Early 2000s
Although enduring a troubled first few years, Poundland has since become a multi-million pound businessBusiness
A business is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit...
, with its 150th store opening in Northampton
Northampton
Northampton is a large market town and local government district in the East Midlands region of England. Situated about north-west of London and around south-east of Birmingham, Northampton lies on the River Nene and is the county town of Northamptonshire. The demonym of Northampton is...
in mid-2006 and a gross turnover of £311 million in 2007, up from £281m the previous year. Following a management buy-out in 2002, the company has continued to grow with annual profit growth of 23.44% (2007) and aims to continue its store expansion by 30 a year into 2009, overseen by James McCarthy. Chairman Colin Smith, speaking in April 2005 as Poundland revealed it had invested £20–25 million in building a 300000 square feet (27,870.9 m²) distribution centre, said there was great scope for further growth, saying "We can clearly conceive this chain having 400-plus stores in future".
Poundland operate a recycling
Recycling
Recycling is processing used materials into new products to prevent waste of potentially useful materials, reduce the consumption of fresh raw materials, reduce energy usage, reduce air pollution and water pollution by reducing the need for "conventional" waste disposal, and lower greenhouse...
initiative through which they will give money for old mobile phone
Mobile phone
A mobile phone is a device which can make and receive telephone calls over a radio link whilst moving around a wide geographic area. It does so by connecting to a cellular network provided by a mobile network operator...
s, while at the same time making charitable
Charity (practice)
The practice of charity means the voluntary giving of help to those in need who are not related to the giver.- Etymology :The word "charity" entered the English language through the Old French word "charité" which was derived from the Latin "caritas".Originally in Latin the word caritas meant...
contributions and helping the environment.
Late-2000s' economic crisis
Poundland, unlike many of its rivals, have been one of the few to report strong sales in a time of economic crisis, with 2008-2009 revenue just short of £400m, up from £330m for 2007-2008. Despite this, Poundland has not been totally immune to the recession. The retailer has been forced to close down stores that are not financially viable, even if well-positioned. Such was the case with their store in West EalingWest Ealing
West Ealing is a place in the London Borough of Ealing in west London.-History:West Ealing in its present form is less than 100 years old....
, where it is believed high rental costs were one of the reasons why the company pulled out of the area. Although the chain has seen their strongest growth and sales during the recession, CEO Jim McCarthy notes that there is a common misconception that Poundland is a better business in a recession, when actually they're better during normal economic conditions, but are very robust to manage well despite the state of the economy.
When the rate of VAT
Vat
Vat or VAT may refer to:* A type of container such as a barrel, storage tank, or tub, often constructed of welded sheet stainless steel, and used for holding, storing, and processing liquids such as milk, wine, and beer...
was reduced in November 2008 to 15%, Poundland's prices remained fixed at £1, by reason that they have kept the same single price point of £1 for 18 years and during that time have always absorbed duty and increased supplier costs without raising its price point. Chief executive Jim McCarthy said the chain will pass the savings on to customers in other ways.
With difficult economic conditions continuing into 2009, the supermarket retailer Asda
Asda
Asda Stores Ltd is a British supermarket chain which retails food, clothing, general merchandise, toys and financial services. It also has a mobile telephone network, , Asda Mobile...
announced in January 2009 that they would cut the price of many of their branded products such as Colgate toothpaste to just £1, in competition with Poundland who are offering the same branded products at the £1 price point. In response, Poundland introduced multi-buy offers to provide a larger quantity of the products for the same price of £1. The announcement comes after reports show that value retailers are seeing their sales and profits boom during the credit crunch, with value-conscious customers making the switch from traditional larger supermarket retailers for their everyday necessities. The retailer had a good start into 2010 when they announced they had seen a surge in sales by nearly 35% over the 2009-2010 festive period.
Reports emerged in September 2008 that Poundland's owners, Advent International
Advent International
Advent International is a global private equity firm focused on buyouts of middle market growth companies in Western and Central Europe, North America, Latin America and Asia...
, were to put the retail chain up for sale, with figures showing that value retailers are seeing business boom in the current economic climate. These plans were confirmed in March 2010, when it was reported that Barclays Private Equity
Barclays Private Equity
Barclays Private Equity is the Private Equity division of Barclays Capital, the Investment Banking arm of Barclays plc. BPE have seven offices across four countries. Started in 1982 they have invested in over 350 businesses including Admiral Group and Dial-a-Phone. Typically €500m is invested per...
has expressed an interest in a potential take-over of Poundland for about £200m, although given that Poundland is on track to increase its turnover and profit in the 2009-2010 financial year, a higher price tag is possible. Advent originally bought Poundland in 2002 for £50 million and are reported to have hired Close Brothers to advise on its strategic options.
Management
In 2002, Dave Dodd, co-founder of the chain, led a management buy-out by Advent InternationalAdvent International
Advent International is a global private equity firm focused on buyouts of middle market growth companies in Western and Central Europe, North America, Latin America and Asia...
worth £47.5m for 78% of the company, where he received £304,000, making him worth some £25 million at that time. The sale allowed for the company's accelerated growth, expanding the store portfolio to well over 150 throughout the UK and creating an additional 500 jobs. He became chief executive with a 12% share in the business, and brought in Colin Smith as chairman, former chief executive of Safeway
Safeway (UK)
Safeway was a chain of supermarkets and convenience stores in the United Kingdom. It started as a subsidiary of the American Safeway Inc., before being sold off in 1987....
.
James McCarthy took over from Dave Dodd as chief executive of the value retailer in September 2006. He joined Poundland having been lured away as managing director at Sainsbury's, with the offer of an "attractive equity incentive" that he will be able to cash in when the group's US owner, Advent International, sells out.
Business practice
DHL Exel Supply ChainDHL
DHL Express is a division of the German logistics company Deutsche Post providing international express mail services. DHL is a world market leader in sea and air mail....
announced in March 2008 that it won a new three year contract worth £9 million with Poundland for transporting and supplying stock. DHL will be importing consumer products from overseas countries such as China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
, to transport them to Poundland stores throughout the UK. DHL will transport a variety of products for Poundland from UK outbases in Billingham, Hatfield and Bellshill.
Sales strategy
Poundland's biggest sales advantage is their price consistency across all products. While other retailers must decide upon the price of each individual product and have this clearly displayed to their customers, Poundland may simply move stock onto its shelves from their warehouses, so customers always know how much a product costs. Poundland promote this strategy through their slogan, "Yes, Everything's £1!". Although the retailer encountered initial scepticism from some suppliers worried about selling their top brands in a discount environment, this was quickly dispelled and the big brand suppliers now deal directly with the retailer. Suppliers can see the benefits to this strategy being that they know exactly where the products are going, the quantity being sold and the price the retailer is selling them at. Running a store in which prices cannot change at all presents interesting challenges, particularly with inflation, as it is difficult to change all the signs to read, for example, "everything is £1.05", although inflation has also meant that there are products which could not previously sell that suddenly are on their radar due to RRPSuggested retail price
The manufacturer's suggested retail price , list price or recommended retail price of a product is the price which the manufacturer recommends that the retailer sell the product. The intention was to help to standardise prices among locations...
prices exceeding £1. Upon joining Poundland as CEO, McCarthy had plans to expand the price offering and increase the margin, envisaging a £2 section, a 50p section, a discount zone, and so forth. Upon visiting America to see how the discount stores over there did it, the overwhelming message was not to change the single price as customers understand it. The retailer is able to dismiss concerns whenever the pound becomes weak, as this means shipping and freight costs also reduce, which counteract the impact of a weaker pound.
Since November 2003, all of Poundland's stores have been using an advanced point of sale
Point of sale
Point of sale or checkout is the location where a transaction occurs...
solution, developed in-house running on Epson's touchscreen
Touchscreen
A touchscreen is an electronic visual display that can detect the presence and location of a touch within the display area. The term generally refers to touching the display of the device with a finger or hand. Touchscreens can also sense other passive objects, such as a stylus...
Intelligent Registers (IRs). The primary purpose is to track and understand which products customers are buying, allowing for up-to-date tracking of the most popular products, helping to ensure constant stock via automated ordering. Their PoS system is set to improve further, with trials underway of contactless payment
Contactless payment
Contactless payment systems are credit cards and debit cards, key fobs, smartcards or other devices which use RFID for making secure payments. The embedded chip and antenna enable consumers to wave their card or fob over a reader at the point of sale. Some suppliers claim that transactions can be...
s in two of their London stores for payments of £10 or less to make purchasing goods even quicker. The technology was introduced in 2007, but few retailers have so far announced full roll-outs of it.
Plans to launch a transactional
Financial transaction
A financial transaction is an event or condition under the contract between a buyer and a seller to exchange an asset for payment. It involves a change in the status of the finances of two or more businesses or individuals.-History:...
web site before the end of 2009 were under consideration during 2008-2009, in an effort to attract consumers not served by any of its stores. The proposed site would offer a limited range of products with best-sellers and seasonal items featuring strongly, such as Halloween
Halloween
Hallowe'en , also known as Halloween or All Hallows' Eve, is a yearly holiday observed around the world on October 31, the night before All Saints' Day...
and Christmas
Christmas
Christmas or Christmas Day is an annual holiday generally celebrated on December 25 by billions of people around the world. It is a Christian feast that commemorates the birth of Jesus Christ, liturgically closing the Advent season and initiating the season of Christmastide, which lasts twelve days...
products. Poundland ran a similar trial
Trial
A trial is, in the most general sense, a test, usually a test to see whether something does or does not meet a given standard.It may refer to:*Trial , the presentation of information in a formal setting, usually a court...
scheme during the early 2000s, with an average transaction value of £25. However, CEO James McCarthy said he had decided to postpone plans for transactional web site indefinitely, to concentrate on opening new stores.
Products offered
Poundland offer a range of over 3000 products, with 10,000 new products featured in any year. David Coxon, Buying & Merchandising Director, defines stock as falling into one of three different categories: ongoing core lines (products bought direct from the manufacturer), seasonal ranges and clearance stock.Until recently, all unbranded products stocked by Poundland, which account for roughly 70% of total stock, would carry the Poundland branding and logo. However, the retailer has been able to increase sales by removing the Poundland brand
Brand
The American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
ing and creating around 50 sub-brands, such as Beauty Nation, Kitchen Corner and Toolbox for its value line of DIY products. In total, the retailer stocks 1000 branded products, the majority being food and drink, and more recently have introduced eggs to eight of its stores as part of a trial, which the retailer believes is likely to be a "top 20 volume seller". In 2003, The Grocer reported that approximately 400 of the chain's 2000 stock-keeping units (SKUs) are in impulse and grocery lines. Food products now account for 14 per cent of store space and 28 per cent of revenue, with 55% of its customers purchasing food or drink, particularly taking advantage of their multibuy offers such as four-for-£1 deals on branded crisps, confectionery
Confectionery
Confectionery is the set of food items that are rich in sugar, any one or type of which is called a confection. Modern usage may include substances rich in artificial sweeteners as well...
and soft drink
Soft drink
A soft drink is a non-alcoholic beverage that typically contains water , a sweetener, and a flavoring agent...
s.
In October 2009, Poundland launched their own range of bagged sweets branded "Sweet Heaven", in a bid to help fill a gap left in the high street by the demise of Woolworths. The range will include a number of favourites that used to be found in the Woolworths' Pick n Mix selection. As well as their own brand
Store brand
Store brands are a line of products sold by a retailer under a single marketing identity. They bear a similarity to the concept of House brands, Private label brands in the United States, own brands in the UK, and home brands in Australia and generic brands...
line of products, the retailer also sells hundreds of products from other top brands such as Colgate
Colgate (toothpaste)
Colgate is an oral hygiene product line of toothpastes, toothbrushes, mouthwashes and dental floss.-Duraphat:Duraphat is a professional strength paste intended for the treatment and prevention of dental caries....
, Walkers
Walkers (snack foods)
Walkers is a British snack food manufacturer operating mainly in the United Kingdom and Republic of Ireland and to a lesser extent on the European continent. They are best known for manufacturing crisps. They hold 47 per cent of the British crisp market...
and Cadburys to name a few. Poundland are officially Britain's largest seller of batteries
Battery (electricity)
An electrical battery is one or more electrochemical cells that convert stored chemical energy into electrical energy. Since the invention of the first battery in 1800 by Alessandro Volta and especially since the technically improved Daniell cell in 1836, batteries have become a common power...
, stocking reputable brands such as Sony
Sony
, commonly referred to as Sony, is a Japanese multinational conglomerate corporation headquartered in Minato, Tokyo, Japan and the world's fifth largest media conglomerate measured by revenues....
, Panasonic
Panasonic
Panasonic is an international brand name for Japanese electric products manufacturer Panasonic Corporation, which was formerly known as Matsushita Electric Industrial Co., Ltd...
and Kodak in quantities priced more competitively than their closest rivals, with the Kodak value pack being one of their best sellers and only exclusive to Poundland. Some of the products offered by Poundland which carry their branding are in fact supplied by manufacturers who are fussier about the retail positioning of their products and would rather allow their products to sell without their own branding attached. Poundland often sell large quantities of their stock to other retailers off-the-shelf, where it is cheaper for these retailers to pay £1 each for a bulk purchase than it would be to pay a discount
Discounts and allowances
Discounts and allowances are reductions to a basic price of goods or services.They can occur anywhere in the distribution channel, modifying either the manufacturer's list price , the retail price , or the list price Discounts and allowances are reductions to a basic price of goods or services.They...
ed bulk-purchase rate elsewhere.
Store expansion
As can be seen in the graph to the left, store growth was slow, but steady year-on-year until 2003, when the retailer almost doubled their amount of stores over the 3 year period to 2006, from 80 to 150. Growth then stabilised again at around 150 stores until early 2008, when the retailer took advantage of the economic downturn to further expand their store portfolio at an average rate of 3.7 stores a month, from February 2008 - September 2009. Poundland have a keen interest to expand their store portfolio by 30 new stores every year, while also increasing its optimum store size by 25% to around 7000 square feet (650.3 m²), comprising around 5000 square feet (464.5 m²) of sales space. Poundland's property director Craig Bales is responsible for store expansion, saying that "although the economy was suffering, this had not resulted in a ready supply of suitable stores for expansion."In 2007, Chief Executive Jim McCarthy said that the retailer would consider expanding operations into Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
and the far east
Far East
The Far East is an English term mostly describing East Asia and Southeast Asia, with South Asia sometimes also included for economic and cultural reasons.The term came into use in European geopolitical discourse in the 19th century,...
once it has extended its UK portfolio to 650 stores. The retailer reached their first milestone in May 2004 with their 100th store opening in Merry Hill Shopping Centre
Merry Hill Shopping Centre
Westfield Merry Hill is a shopping centre in Brierley Hill near Dudley, West Midlands, England. It was developed between 1985 and 1990, with several expansion and renovation projects taking place since. The original developers and owners were Richardson Developments but the Centre has had a number...
, Dudley
Dudley
Dudley is a large town in the West Midlands county of England. At the 2001 census , the Dudley Urban Sub Area had a population of 194,919, making it the 26th largest settlement in England, the second largest town in the United Kingdom behind Reading, and the largest settlement in the UK without...
, and on 27 November 2008, Coronation Street
Coronation Street
Coronation Street is a British soap opera set in Weatherfield, a fictional town in Greater Manchester based on Salford. Created by Tony Warren, Coronation Street was first broadcast on 9 December 1960...
actor Anthony Cotton opened Poundland's 200th store at the Frenchgate Centre in Doncaster
Doncaster
Doncaster is a town in South Yorkshire, England, and the principal settlement of the Metropolitan Borough of Doncaster. The town is about from Sheffield and is popularly referred to as "Donny"...
,. The retailer expanded into Northern Ireland
Northern Ireland
Northern Ireland is one of the four countries of the United Kingdom. Situated in the north-east of the island of Ireland, it shares a border with the Republic of Ireland to the south and west...
and had opened 6 stores there before Christmas
Christmas
Christmas or Christmas Day is an annual holiday generally celebrated on December 25 by billions of people around the world. It is a Christian feast that commemorates the birth of Jesus Christ, liturgically closing the Advent season and initiating the season of Christmastide, which lasts twelve days...
2009, selling locally-sourced goods such as milk as well as the usual branded products. The company also celebrated a milestone when their 250th store opening on 21 November 2009, ahead of schedule and had planned for another 17 before Christmas 2009. The retailer is set to invest around £10 million to open at least another 50 stores in the 2010-2011 financial year.
Dealz
On 2nd August 2011, Poundland announced that it is going to expand into Europe, under the name D€ALZ. The first 6 new stores will open in Republic of Ireland in March 2012, creating 120 jobs.The name ‘Euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
land’ is not going to be used so it will avoid the impact of price volatility in the region and as potential customers did not like the name.
Instead of everything being the same price, like the current Poundland model, there will be different prices.
As well as offering the Poundland mix of big brands such as Kelloggs, Cadbury’s, Maxwell House, Pantene and Kodak, the stores will also sell locally sourced products including milk, eggs and crisps.
Customer base
Poundland boast a loyal customer baseCustomer base
The customer base is the group of customers and/or consumers that a business serves. In the most situations, a large part of this group is made up of repeat customers with a high ratio of purchase over time. These customers are the main source of consumer spending...
, with roughly 2.75 million predominantly female shoppers (who account for roughly 80% of the customer base) every week in the C1, C2, D and E
NRS social grade
The NRS social grades are a system of demographic classification used in the United Kingdom. They were originally developed by the National Readership Survey in order to classify readers, but are now used by many other organisations for wider applications and have become a standard for market...
categories. However, it claims 10% of its customers are in the A/B group, with the retailer seeing a 22% rise in the number of shoppers in this group over the 2007/2008 period. Poundland also attract students and the elderly who typically watch their budgets and look for bargain
Bargain
Bargain could mean some of the following:* The process whereby buyer and seller agree the price of goods or services. See bargaining.* An agreement to exchange goods at a price.* Such an agreement where one of the parties thinks the price is very favourable....
s.
The retailer has been keen in recent years to move away from their reputation
Reputation
Reputation of a social entity is an opinion about that entity, typically a result of social evaluation on a set of criteria...
of only appealing to low-income households, as they continue to expand into mainstream shopping centres and districts, with an increasing number of higher earning consumers in the market for a bargain. Poundland's ability to fight inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
by guaranteeing their prices will remain consistent is just one factor in their appeal to a larger customer base.
An increasing number of households are seeing Poundland as a means to purchase their regular household necessities at a time of financial struggle. Where some high street shops have reported a downturn in profit
Profit (economics)
In economics, the term profit has two related but distinct meanings. Normal profit represents the total opportunity costs of a venture to an entrepreneur or investor, whilst economic profit In economics, the term profit has two related but distinct meanings. Normal profit represents the total...
s, Poundland, a member of the bargain shop retail sector, have seen strong growth attributed to rapid price inflation
2007–2008 world food price crisis
World food prices increased dramatically in 2007 and the 1st and 2nd quarter of 2008 creating a global crisis and causing political and economical instability and social unrest in both poor and developed nations. Systemic causes for the worldwide increases in food prices continue to be the subject...
of many of the household necessities, with an increasing number of hard-pressed customers visiting its stores for bargains, bulk buying items such as toothpaste
Toothpaste
Toothpaste is a paste or gel dentifrice used with a toothbrush as an accessory to clean and maintain the aesthetics and health of teeth. Toothpaste is used to promote oral hygiene: it serves as an abrasive that aids in removing the dental plaque and food from the teeth, assists in suppressing...
and tinned food.
Competition
Independent business
In business, an independent business as a term of distinction generally refers to privately owned companies . Independent businesses most commonly take the form of sole-proprietorships...
es and smaller price-point retail chains such as Poundworld. Poundland's closest and largest rival in the sector is 99p Stores
99p Stores
99p Stores Ltd is a family run business founded in January 2001 by entrepreneur Nadir Lalani, who opened the first store in the chain in Holloway, London, with a further three stores opening later that year...
, whose buying director Faisal Lalani cited one of their main aims being to catch up with Poundland and their 223 stores as of August 2009.
Other larger chains have also been hit by the success of discount retailers, with many budget-conscious customers making the switch from traditional larger supermarket retailers for their everyday necessities. A strategy adopted by Poundland to lure customers away from the larger supermarket chains is to give them confidence with reputable household brands, then bring them in en-masse by selling those names at prices that defy and undercut almost any competition
Competition (economics)
Competition in economics is a term that encompasses the notion of individuals and firms striving for a greater share of a market to sell or buy goods and services...
, at which point try to entice the 40% to impulse
Impulse (psychology)
An impulse is a wish or urge, particularly a sudden one. It can be considered as a normal and fundamental part of human thought processes, but also one that can become problematic, as in a condition like obsessive-compulsive disorder....
buy other products on offer, hopefully own-brand
Store brand
Store brands are a line of products sold by a retailer under a single marketing identity. They bear a similarity to the concept of House brands, Private label brands in the United States, own brands in the UK, and home brands in Australia and generic brands...
, that they may not necessarily have planned to purchase. In response to this trend, supermarket retailer Asda
Asda
Asda Stores Ltd is a British supermarket chain which retails food, clothing, general merchandise, toys and financial services. It also has a mobile telephone network, , Asda Mobile...
announced in January 2009 that they would cut the price of many of their branded products such as Colgate
Colgate (toothpaste)
Colgate is an oral hygiene product line of toothpastes, toothbrushes, mouthwashes and dental floss.-Duraphat:Duraphat is a professional strength paste intended for the treatment and prevention of dental caries....
toothpaste to just £1, in competition with Poundland who are offering the same branded products at the £1 price point. In an effort to stifle the competition, Poundland introduced multi-buy offers to provide a larger quantity of the products for the same price of £1 to avoid deterring this lucrative band of customers back to Poundland's larger competitors. However, research conducted by The Grocer
The Grocer
The Grocer is a British market leading magazine devoted to grocery sales, published by William Reed Business Media. It has been published since 1862. Its readership encompasses every aspect of the industry, from directors of the large multiples to independent retailers...
magazine in August 2009 found that of the 1300-odd supposedly discounted products on sale in ASDA during July 2009, a third were the same price as in March 2008 and 173 products had been selling for less than £1 during Spring 2009, while prices at Poundland have remained fixed since the chain was founded in 1990.
Whilst Poundland's competition will primarily be other value retailers, the retailer may sometimes find they are competing with other retailers' own brand produce. It was reported in May 2010 that Poundland were selling rebranded lotions for £1, exactly the same products that Boots
Boots UK
Boots UK Limited , is a leading pharmacy chain in the United Kingdom, with outlets in most high streets throughout the country...
were selling under their own brand for significantly more. Boots responded to the findings by suggesting that the products available in Poundland stores were likely excess stock they had sold off below cost price which had been destined for overseas markets, with some inadvertently directed into UK distribution without their permission.
Financial performance
Poundland have seen strong increases in turnover year on year, helped by an increase of store openings and turbulant economic conditions.| Year ending | Turnover (£m) | Gross profit Gross profit In accounting, gross profit or sales profit is the difference between revenue and the cost of making a product or providing a service, before deducting overhead, payroll, taxation, and interest payments... (£m) |
Operating profit Earnings before interest and taxes In accounting and finance, earnings before interest and taxes is a measure of a firm's profit that excludes interest and income tax expenses. Operating income is the difference between operating revenues and operating expenses... (£m) |
Pre-Tax profit Net profit Net profit or net revenue is a measure of the profitability of a venture after accounting for all costs. In a survey of nearly 200 senior marketing managers, 91 percent responded that they found the "net profit" metric very useful... (£m) |
Retained profit Net income Net income is the residual income of a firm after adding total revenue and gains and subtracting all expenses and losses for the reporting period. Net income can be distributed among holders of common stock as a dividend or held by the firm as an addition to retained earnings... (£m) |
|---|---|---|---|---|---|
| 28 March 2010 | 510 | 19.8 | |||
| 29 March 2009 | 396 | 20 | 8.6 | 11.8 | |
| 30 March 2008 | 330 | 15.7 | 4.2 | 8 | |
| 1 April 2007 | 310.7 | 112.9 | 11.7 | 5.6 | 3.5 |
| 2 April 2006 | 281.2 | 100.4 | 5.4 | 4.2 | 0.15 |
| 3 April 2005 | 239.9 | 89.4 | 14.8 | 10.7 | -0.68 |
| 28 March 2004 | 195.5 | 71.6 | 13.9 | 10.9 | 7.1 |
| 30 March 2003 | 192.9 | 67.2 | 9.5 | 4.9 | 8.8 |
Criticism and customer perception
Although the £1 price prevails throughout the stores, some branded products are offered cheaper or with better value at larger supermarketSupermarket
A supermarket, a form of grocery store, is a self-service store offering a wide variety of food and household merchandise, organized into departments...
chains, as the price consistency across all product ranges in Poundland creates customer perception of a bargain. For example, two reporters from the Daily Mirror newspaper in November 2009 compared prices for branded products offered at Poundland with the same products offered at larger supermarket stores and found in some cases the larger supermarket stores offered better value for money.
Reviewers tend to speak positively about the store on many online review sites, but some tend to criticize poor store layout, design and overcrowding, as well as inadequate customer service
Customer service
Customer service is the provision of service to customers before, during and after a purchase.According to Turban et al. , “Customer service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer...
and staff knowledge. Despite this, in a survey the retailer conducted in July 2007, 99% of respondents said they would recommend the chain.
Environmental concerns
In 2008, Poundland infuriated green campaigners by flying Polo peppermints 7300 miles (11,748.2 km) into the UK from IndonesiaIndonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
, rather than sourcing them locally. Despite Poundland being close to the Nestle
Nestlé
Nestlé S.A. is the world's largest food and nutrition company. Founded and headquartered in Vevey, Switzerland, Nestlé originated in a 1905 merger of the Anglo-Swiss Milk Company, established in 1867 by brothers George Page and Charles Page, and Farine Lactée Henri Nestlé, founded in 1866 by Henri...
Rowntree's
Rowntree's
Rowntree's was a confectionery business based in York, England. It is now a historic brand owned by Nestlé, used to market a range of fruit gums and pastilles formerly owned by Rowntree's. Following a merger with John Mackintosh & Co., the Company became known as Rowntree Mackintosh, was listed on...
factory in York
York
York is a walled city, situated at the confluence of the Rivers Ouse and Foss in North Yorkshire, England. The city has a rich heritage and has provided the backdrop to major political events throughout much of its two millennia of existence...
, which has made the mint since 1948, Poundland insists it is cheaper for them to source the product
Import
The term import is derived from the conceptual meaning as to bring in the goods and services into the port of a country. The buyer of such goods and services is referred to an "importer" who is based in the country of import whereas the overseas based seller is referred to as an "exporter". Thus...
from overseas, even taking in to account transport costs, to ensure it can continue to provide its customers with value for money. It later emerged that the mints were transported by ship, not by air, so the environmental objections were less valid.
Health and safety
Although Poundland claim that they strive to provide its customers with good quality products while keeping the cost low, there are occasionally some products which fail to meet health and safety standards, and in some cases pose a health threat to the consumer. One such example occurred in February 2006, when dangerous car jump leads were withdrawn from sale across all stores. Although the cable gave the appearance of being heavy duty, it was found to only have a 3 amp wire in the centre following tests by council officers which, if used, could quickly overheat, melt and possibly catch fire. In October 2008, the retailer was forced to recall HalloweenHalloween
Hallowe'en , also known as Halloween or All Hallows' Eve, is a yearly holiday observed around the world on October 31, the night before All Saints' Day...
witch hats, as checks on the item revealed a small number of chemicals classified as unsafe for young children.
Aside from potentially unsafe products, Poundland has also been found guilty of blocking fire exits at a cost to the company of £3000, as well as also being fined £13,000 in 2005 for unsafe racking in its warehouse.
In October 2009, the newspaper Newbury Today reported that customers who purchase a miniature keyring knife from Poundland stores are breaking the law as soon as they leave the store. The blade looks like a Stanley-style knife and the law states this makes it illegal to possess in public unless it is for work or religious reasons. The retailer had been highlighted about the problem previously, however continued to sell the item, despite some customers ending up in court and being prosecuted for possession of the item. Poundland spokeswoman Emma Broomhall said these had now been withdrawn from sale in Newbury and across all its stores, however did not address the claim that its customers had been liable for prosecution once they left the store.
Staff ban on wearing poppies
In response to a news story about a staff member being sent home for wearing a Remembrance poppyRemembrance poppy
The remembrance poppy has been used since 1920 to commemorate soldiers who have died in war. They were first used in the United States to commemorate soldiers who died in World War I . Today, they are mainly used in current and former Commonwealth states to commemorate their servicemen and women...
in the autumn of 2011, Poundland posted a comment on their Facebook and Twitter social media stating "Poundland is not against colleagues wearing a poppy; however, colleagues are not allowed to wear one on the shop-floor simply as it does not abide by the uniform rules." .
This policy attracted much attention through social media including Facebook and Twitter, and various customer forums.
Poundland backed down from the ban on 31 October 2011,and released the statement that employees will be allowed to "use their own discretion in wearing poppies" after hundreds of customers threatened to boycott the store.
See also
- Variety store
- Warburg PincusWarburg PincusWarburg Pincus, LLC is an American private equity firm with offices in the United States, Europe, Brazil and Asia. It has been a private equity investor since 1966...
- Advent InternationalAdvent InternationalAdvent International is a global private equity firm focused on buyouts of middle market growth companies in Western and Central Europe, North America, Latin America and Asia...
- 99p Stores99p Stores99p Stores Ltd is a family run business founded in January 2001 by entrepreneur Nadir Lalani, who opened the first store in the chain in Holloway, London, with a further three stores opening later that year...
- Poundworld
External links
- Poundland's official website
- Poundland's Blog
- Poundland's Facebook site
- Poundland's Twitter site
- Reviews at DooYoo