As the chain opens it’s 400th store, its profits are up at 27% as shoppers seek bargains. In the last year to April 1 the chain has opened 62 stores, thirteen of which were opened in Ireland under the name ‘Dealz’. Most of the stores were opened ont he high street, Poundland is now operating on more than twenty retail parks out-of-town.
So called “Value-end” retailers have seen sales rise since the market downturn in 2008 as more and more consumers are seeking bargains. This year sales at Poundland have risen about 20% to £780m.
In 2011, Poundland announced its plans to expand into Europe starting in Ireland where the first stores were opened in October 2011, with a total of 6 planned to be open by March 2011. Poundland, or ‘Dealz’ welcome reception has seen it over double this number. However, the retailer is still researching where it could expand in continental Europe and has no plans to open any stores outside of the UK and Ireland this year. It will, however, be operating in Europe under the ‘Dealz’ name as research has concluded that consumers in Europe are unhappy with anything associated with the Euro.
The chief executive, Jim McCarthy, has asserted the need for caution, making it clear that the group is very keen to get the expansion ‘absolutely right’. McCarthy has also commented on the rise in sales this year, as he suspects the percentage of squeezed AB shoppers was higher. He believes that national psyche in regards to saving has changed as a result of the economic downturn, and this is unlikely to change even as the country climbs out of the recession. This can be seen by the marked rise in populatirty of toher bargain retail establishments like Aldi and TK Maxx.
Top sellers in Poundland this year have ranged from confectionary, to umbrellas to 500,000 garden gnomes.
Warburg Pincus, a private equity firm, is the majority owner of Poundland.