If he can do with general merchandise what he has done in sportswear and fashion, Mike Ashley could be about to move up into the value sector’s Premier League.
Due to the recent rise of the savvy cash-strapped shopper, the development of the value general merchandise sector has been fascinating to watch.
And thanks to an audacious new market entrant, it’s about to get more fascinating.
Mike ‘pile it high, sell it cheap’ Ashley looks poised to take on the crowded variety store market, which is dominated – at present - by the towering and ever-expanding Poundland and B&M.
It emerged this week Ashley has opened a variety store in Kidderminster under the not inconspicuous name Mega Value. Going by the fascia, it doesn’t look like he spent much of his billion-pound fortune on the shopfit - in fact it looks an awful lot like Woolworths in its death throes.
But the draw of a variety store is not usually cutting-edge shop design - it’s product and price. And they are two things hard-nosed Ashley has mastered at Sports Direct. If anyone knows how to get a mega deal from suppliers, it’s him.
With a range including toys, homewares, pet supplies and health and beauty under the bold tagline ‘We will beat anyone’s price’, no doubt management at Poundland and B&M will be watching on with a certain nervousness.
But whilst no one has ever known Ashley to do anything by halves, we must not get too carried away just yet. As usual, Ashley is remaining tight-lipped about the venture. It is not yet clear if this is the start of a nationwide rollout or a one-off to test the waters.
If there are plans afoot for a large-scale business, is there really enough room in the market for another value retailer? Poundland and B&M alone already have 1,000 stores across the UK between them, and there are plans to double that count in the coming years. Is Ashley, for once, too late to the party?
While there are many unknowns surrounding Mega Value, there is one certainty: you’d be a fool to bet against Ashley. If he can do with general merchandise what he has done in sportswear and fashion, Ashley could be about to move up into the value sector’s Premier League.
- Nicola Harrison is content editor at Retail Week