Single price point retailer Poundland plans to launch its transactional website before the end of the year.
Poundland revealed that the site is “ready to roll” but it will be tested first. Poundland hopes to leverage its store estate for click-and-collect, and could even trial shops at stations to make delivery more convenient.
Poundland chief executive Jim McCarthy said: “Online is much more challenging [than stores] because it isn’t obviously such a rich source of profit for a value retailer.”
He emphasised that “bricks and mortar is our number one priority.”
Value retailers and single-price point retailers in particular have found it difficult to launch online so far due to the low average order transaction against high overheads.
But McCarthy said that when Poundland’s co-founder Steve Smith launched Poundland’s transactional website “many moons ago” it recorded average transaction values six to eight fold up on store ATV. The website eventually closed.
But McCarthy added: “This makes the economics that much more attractive.”
McCarthy declined to give any detail about the delivery costs and the model it will use but he said he is hoping the website could be useful for B2B customers who wish to buy in bulk, as well as for customers buying multiple items. But he said that heavy items such as a bag of sugar won’t feature on the website.
He added that a Dealz website will follow Poundland’s online offer, which is being built by Ampersand Commerce, in a few years as it establishes itself as a brand.
McCarthy said its first Spanish store, which opened yesterday in Torremolinos under the Dealz fascia, served 2,700 customers at close of play. Stores opened until late, with the busiest trading period between 8pm and 10pm. It added that the Redbull energy drink was its top seller.
Poundland revealed that in 2013 like-for-likes fell 1.7% after new value competitors snapped up former Peacocks stores when the fashion chain fell into administration. Poundland chief financial officer Nick Hateley said it had a “significant impact”.
Like-for-likes for the year to March 2014 have returned to normal growth this year, growing 1.9%.
Hateley said in the year Poundland launched its own range of hair accessories, to compete with retailer Claire’s Accessories, and a healthy snack range and an indulgent snack range, which includes products such as wasabi nuts. McCarthy revealed Poundland will be launching into jewellery with its own brand range called Purple Ivy.
McCarthy said consumers’ eye for a bargain is here to stay. “Habits over the last five years are sticky and consumers have more choice than ever before and we fulfil a very important part.
“It’s important to note what Aldi and Lidl have done to educate the public on quality products at discount prices.”
Poundland this morning revealed underlying pre-tax profits jumped 23.5% to £36.8m in the year to March 30.
Poundland reveals rising sales and profits in maiden results update
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Poundland to launch transactional website before end of year