Britain’s retailers have found the economic downturn very challenging since 2007. However, one retail sector that seems to have thrived is “discount retailing”. And one of the growth stars of this sector has been the privately-owned Poundland.
The chain, which is led by chief executive Jim McCarthy, has been expanding at the rate of 60 new stores a year.
It was bought by venture capitalist Advent International for £50m in 2002 and they sold it on to another venture capitalist (Warburg Pincus) eight years later.
The first Poundland store was opened in 1990 and it made a £31.7m profit in 2011/12. It aims to reach 500 stores and £1 billion turnover next year. It created 2,000 jobs in 2012 with another 2,000 predicted this year, taking the total staff to 14,000.
Poundland is now Europe’s biggest single-price discount retailer as measured by number of stores operated. Poundland currently serves around four million shoppers.
Jim McCarthy has explained Poundland's strong growth in recent years as follows:
“Our fixed price makes it easy for families to budget as they can see how much they’ve spent, before they get to the checkouts.”
"If you buy five products, it can only be £5. I think that the certainty and the ability to budget have an appeal".
The retailer said it had also seen an increase in the number of more "affluent" customers looking to save money in difficult economic times.
Mr McCarthy also explains that Poundland's expansion had also given it greater power when negotiating deals with manufacturers. He says the firm had been able to reduce a number of its costs in areas such as distribution as the store portfolio has expanded.
Poundland is among the retailers that have benefited from the global economic downturn. Value retailers have thrived over the past few years as consumers, under pressure from prices rising faster than wages have sought to