Poundland set for growth with 50 store openings
Budget retail giant Poundland is set to expand further with the opening of at least 50 new UK stores over the next year. Speaking exclusively to Insider, chief executive Jim McCarthy said that the Willenhall-based chain was better placed than some of its competitors with “flexible pricing”, as Poundland’s single price policy “would not be affected by the VAT rise or inflation”.
It was revealed last week that Poundland, which operates more than 300 stores across the UK, was named in the Sunday Times Deloitte Buyout Track 100. The list chronicles the top performing private equity-backed companies over the past two years. Poundland jumped 46 places from last year’s placing at number 92. Profits increased 40 per cent per year, from £15.3m in 2008 to £30.1m in 2010.
McCarthy said that the company’s expansion policy had been key to its profit growth.
“We opened up 60 stores in the eight months running up to Christmas last year,” he said. “We’ll continue this expansion fairly dramatically and intend to open at least 50 more over the next year.”
He also attributed the company’s rise in profits to the “simplicity and consistency” that the Poundland business model provides.
“People are always looking to save money, especially these days,” said McCarthy. “We have thousands of branded products, with new ones being introduced every week – and they’re all the same price. Our customers know they’re getting good quality and good value when they come into our stores.”
In the aftermath of an increase in inflation and the VAT rise, McCarthy said that Poundland’s customers would not feel any effects of a rise in the cost of living.
“Whereas other retailers with flexible prices might suffer, and struggle to keep prices down, our products will not be affected,” he said.
Over the past couple of years, the high street has seen an upsurge of budget retailers. However, McCarthy said that he does not worry about the performance of competitors.
“I am aware of the competition, of course. I take an interest in what they do and respect a great deal of them. But I don’t worry about their performances. We [Poundland] just need to worry about our own performance and concentrate on keeping our creativity levels and momentum high.”
