Although growth has slowed, 99p Stores today posted double digit pre-tax profit growth and strong like-for-like sales last year. Retail Week speaks to managing director Hussein Lalani about the continuing popularity of the chain.
Retail Week: The rate of growth has eased at 99p Stores from a rocketing 350% pre-tax profit to double digit 13% growth, why is this?
Hussein Lalani: The previous year we had exceptional growth. We moved into a new warehouse and the company hit economies of scale. Meanwhile, the majority of stores opened last year opened in the second half of the year and a full year of trading is needed to see the real sales impact of the stores.
Are you concerned by the drop-off in growth?
HL: Absolutely not, look how many shops we have opened and we have a 3.7% like-for-like increase which I think is the best across the sector at the moment.
You plan to open more than 100 stores over the next two years, where will these be?
It’s hard to say exactly here but it will be across the whole of the UK, with a couple if the Republic of Ireland but there is no particular area at the moment. I am looking to fill the high streets with 99p Stores.
The new stores will be a mix across the Family Bargains and 99p Stores fascias.
How do you think Family Bargains is progressing?
HL: It is growing. Relatively speaking it is still a young business and we’re working hard on brand development.
We’ve had to make contacts with new suppliers for washing machines and dishwashers, as well as garden centre suppliers. These connections have helped us with our supplies into 99p Stores.
The value will keep getting better.
You have extended your food offering, do you think customers can do a full weekly food shop at a 99p store?
HL: I do think a lot of families see us as a one-stop shop.
I know for a fact that compared with the other discounters we have always had a much more comprehensive food offering and we wanted to expand that. So now we offer frozen food, which we trialled in stores in autumn last year. We’ve been rolling it out.
RW: You made your first step overseas last year, opening stores in Ireland under the Euro 50 fascia, do you plan to open in any other countries?
HL: Not at the moment. We will see how Ireland goes and if we can perfect that model then we might look to continental Europe.