Poundland profits jump 27% as ABs go budget shopping
£1-an-item chain plans to open hundreds more stores as recession brings in middle-class customers
PROFITS of the budget supermarket chain Poundland, which sells everything from shampoo to confectionary for £1, have shot up by 27 per cent because the recession has brought an influx of middle-class shoppers.
The company's chief executive Jim McCarthy said the proportion of AB shoppers using the store, which in the past has been around one in ten shoppers, had increased substantially over the past year.
As The Guardian reports. that change helped Poundland's turnover reach £780m in the year to April, with underlying earnings rising 26.5 per cent to £40.1m.
Food, drink and beauty products were the strongest performers – a reflection of the fact that the likelihood of impulse buying drops from 40 per cent to 30 per cent when times are tough. Yet Poundland customers still went for treats: the chain sold 6m boxes of Maltesers, more than 2.5m CDs and 500,000 garden gnomes.
Poundland boss McCarthy believes the figures reflect a fundamental change in British shopping habits. "Waste of any kind has become abhorrent," he said. "In 1990, when Poundland was created, there weren't many Aldis and Lidls, TK Maxxes and Poundlands. Now there are price comparison sites and people shop with their smartphones. There is definitely some structural shift going on in shopping values."
That spells good news for Poundland, which opened 62 new stores over the past 12 months, including its largest to date in Wolverhampton, containing 1,200 sq meters of shopping space. Those new stores allowed the company to serve 4m customers every week last year, up from 3.5m the previous year.
Having opened its 400th shop, Poundland plans to keep expanding until it hits 1,000, a strategy that includes growing their presence overseas. The company has 13 stores in Ireland under the name Dealz and plans to double this number over the next year. Continental Europe is also in the discounter chain's sights, with a shortlist of target countries already drawn up for new launches.