The budget retailer has confirmed a new pricing structure for its stores across the UK
Poundland announced this morning that it will start new grocery pricing to all its UK stores in a move that it said “takes the discount chain firmly back to its roots”. The shake-up, part of plans to get the business back on track, will streamline grocery ranges at Poundland stores to three straightforward price points – £1, £2, £3 – marking “the end of additional price complexity”.
The fresh pricing strategy, alongside a refocused grocery range, will be introduced to all Poundland’s UK stores in stages between now and September, following a quiet trial at 17 stores in the West Midlands over the past five months. In the trial stores prices were dramatically slashed and ranges concentrated on customer favourites, with shoppers giving the changes “a big thumbs-up”, it said.
It said customer research carried out in the trial stores revealed shoppers believed they offered better value for money (up 3%), wider ranges (up 6%) and a better choice perception (up 9%). In the trial stores, the proportion of grocery items at £1 has risen to more than 60 per cent – a transformation that will now be rolled out UK-wide.
The fresh approach to Poundland’s grocery sections has already rolled out to shops beyond the Midlands – including Manchester (Arndale), Liverpool (Lord Street), Hanley, Brixton and Wandsworth. Items priced at £1 spanning household essentials, groceries and sweets feature Pink Stuff Paste (850g), Cif Lemon Cream cleaner (500ml), Heinz Baked Beans (415g), John West Tuna (125g), Haribo Starmix (160g), and Werther’s Original (135g).
The transformation of snacking, ambient beverages, pet supplies and household categories will finish this week, whilst other grocery lines, confectionery, health and beauty products plus chocolate, biscuits and cakes will transition to the new pricing structure by the end of September.
Once finalised, approximately 60% of grocery products will cost £1, 20% will be priced at £2, and 20% at £3, according to Poundland. During seasonal periods when shoppers desire expanded ranges or larger pack sizes, products at different straightforward prices may become available temporarily, the retailer noted.
“Customers have told us loud and clear during these pilots that they will back a simpler, more focused Poundland that keeps its promise of amazing value,” said managing director Barry Williams.
“We’ve heard them, and the clear success of our pilot is why I’m confident that a Poundland that’s focused on the simple value our customers expect, has a bright future.”
The decision to streamline product ranges and concentrate on three main grocery price points has also dramatically reduced retail crime in the pilot stores, Poundland revealed. By discontinuing the sale of items that appeal to shoplifters such as £5 dishwasher tablets, theft has plummeted by more than 25% in the trial outlets, safeguarding stock and creating a more secure environment for shoppers and staff.
The retailer even disclosed that in one branch – Park Street in Walsall – a habitual thief actually complained that the expensive product they routinely pinched had been removed from shelves. Over the coming months, Poundland will roll out this simplified approach to its general merchandise and clothing sections, providing fewer pricing tiers and more targeted ranges that allow customers to easily recognise the value on offer.
The announcement follows Poundland narrowly escaping administration earlier this week after a restructuring proposal received approval from a High Court judge, just days before the company was scheduled to exhaust its funds. Legal representatives for the chain had informed a hearing on Tuesday that it would enter administration by Friday and was expected to run out of cash by September 7 unless the plan gained approval.
The arrangement will see up to £60 million of fresh funding pumped in to keep the retailer operational, alongside other conditions. Sanctioning the restructure, Sir Alastair Norris said: “I am going to sanction the plan. I will give my reasons later.”
Poundland, established in Burton upon Trent, Staffordshire, in 1990, had roughly 14,700 employees and ran about 800 stores when it was sold by Pepco Group to Peach Bidco, a subsidiary of private equity firm Gordon Brothers, for £1 in June. The firm then unveiled plans to close 68 shops, impacting around 1,000 staff members.
The company also announced its intention to shut down its frozen and digital distribution site at Darton, South Yorkshire, later this year, and another warehouse at Springvale in Bilston, West Midlands, early next year, affecting an additional 350 jobs. The firm also intends to cease online sales via its Poundland.co.uk website next month, and to retire its Perks app.
Three shops were shuttered before July this year, and 37 have been closed this month, including those in Newcastle, Leicester and Peterborough. Another 11 shops, including those in Blackburn, Kettering and Taunton, are set to close on Sunday, and one more shop, in Irvine, North Ayrshire, Scotland, will shut its doors on September 14.
An additional 16 shops, which have not yet been confirmed, are also slated to close.