Middle class fuels Poundland growth
Published 24/11/2010 | 10:22
High street chain Poundland plans to open 50 new stores next year and is considering online trading in an expansion fuelled by the recession, it says.
The bargain retailer said increasing numbers of middle class customers have led to its growth from 263 stores in April to 320 by Christmas.
Chief executive Jim McCarthy said the chain plans to open 50 more stores across the UK in the next financial year and is in discussions about selling homewares, fancy dress and party items over the internet within two years.
Poundland, which began trading in 1990 and has never advertised, reported an operating profit of £21.5 million for the 12 months to March, up 81.5% on the previous year, and a sales increase of 29% to £509.8 million.
Top selling items among its 3,000 products include Kodak batteries, 1.5kg packs of sugar, Maltesers, 2 litre bottles of milk, reading glasses, an emergency tent and Christmas lights.
Mr McCarthy said: "We have two types of customers, those who need to save money and increasing numbers of middle class customers who are choosing to save money to preserve their lifestyle. More middle class customers are trying us out because attitudes have changed and there is no shame in saving money any more. They make a virtue of spending wisely."
The chain has taken over 60 former Woolworths sites since January 2009, with landlords another group to change their attitude toward the budget basement brand, he said.
"At one time we were considered to be perhaps downmarket. But now landlords recognise that we're a major magnet for footfall. We're regularly approached by landlords now to see if we're interested in a site."
He said the chain does not expect an economic recovery to hinder growth, and has plans to expand overseas once it has reached its target of 800 stores in the UK.
"When the economy picks up we expect some of these new shopping behaviours to prove stickier than they were in the last recession. People are now proud to be savvy and save money. We are a good business in a recession but we perform very well in good times as well."