Poundland has launched its first ever summer Sale this week and will be offering thousands of products at a 50p price point.

The move comes after the value retailer added £5 and £2 price points to its offer.

Barry Williams

Barry Williams

Barry Williams

Retail Week spoke to the fixed-price retailer’s trading director Barry Williams about the future of Sales at Poundland, developing an own-brand offer to tackle inflation and the roll-out of Pep&Co shop-in-shops.

Why has Poundland launched its first summer Sale?

It’s a continuation of what we did at Christmas and January where we had this legacy stock and we’re clearing it out of the business.

As we got hold of the business there have been a number of legacy issues that we’ve been dealing with and one of them was the accumulation of stock.

There were some products in January that just weren’t seasonally relevant to put into the sale at that point so we ran some activity in the summer.

Initial results are really promising, it’s going well.

Is having seasonal Sales events to become a staple of the Poundland calendar?

Put it this way, I’m not planning to build up the legacy stock issues the business has faced prior to my arrival – if I do that I’ll be part of the sale!

But at the end of each season, are we going to clear down our stock so we can start the next one with fresh new ranges in the best possible way? Absolutely.

“We’re changing the approach that the business has got, to how it manages its seasonal business”

We’re changing the approach that the business has got, to how it manages its seasonal business.

This idea that product will still be relevant for customers after two, three years and will still hold its value? We’ve gotten rid of that, it clearly doesn’t work in retail and we’re changing it.

What does that mean for Poundland’s wider proposition to ensure you’re still relevant to your shoppers?

Having the freshest, most up to date seasonal offer you can is really important in our marketplace.

In a way, that’s more of an opportunity for a business like Poundland than others because a lot of customers have a pre-conceived idea about the relevance and fashionability of the product, so the more we can innovate and surprise them the better.

The second part is that it’s been quite interesting over the last couple of months to watch the inflation that has been flowing through the market.

“Everybody is trying to convince customers that they’re dropping prices left, right and centre”

 

Everybody is trying to convince customers that they’re dropping prices left, right and centre, and if retailers aren’t trying to convince shoppers of that then manufacturers are trying to hoodwink them by reducing the size of stuff and not really telling them.

In the middle of all that there’s a role for Poundland that says if you’re worried about inflation and how you combat it, the best way to tackle it is to shop at a fixed price retailer.

When brands are going to take part in shrinkflation, what are we going to do to keep providing great value at that prices point? The answer has been creating more of those products ourselves.

Has inflation triggered the rise in own-brand products at Poundland?

Absolutely. Brands are hugely important to our business and our customers love them so we’re never going to walk away from that, but where we feel there’s an opportunity through our brand to create an even better value equation for customers we’re going to do it.

Within all of that, there is a frustration in the sector right now that branded manufacturers are blaming cost price pressures, such as currency fluctuation due to Brexit, as the reason why they’ve got to take 20% weight out of a product.

“The role of the good retailer out there is to protect customers as much as they can”

A lot of people are seeing it more as profiteering, so I think there’s tension in the industry as a result of that.

The suppliers are passing on inflation to the customer through the retailer and it’s through actual traditional inflation prices going up or by getting less for your money.

The role of the good retailer out there is to protect customers as much as they can from that, so that’s where that tension arises.

How is the Pep&Co store-in-store roll out going?

We’re on track to have 100 stores by the end of this year and we’re working on what phase two of that roll out looks like.

It’s interesting for us because there’s free space for us in sites like Woolwich [a former M&S store] because the core Poundland offer’s not big enough to fill the floor space.

By adding in a clothing offer, which is working from a customer perspective but also because the fixed overheads aren’t working, we’re sweating the space a lot harder so it delivers on the bottom line for us as well.

Do you think the pace of that store-in-store roll out will continue?

Absolutely – we’ve got over 800 locations in the UK today and 100 that will take a full Pep&Co and we’re getting clearer on where else can take a full shop-in-shop and where would benefit from a more edited proposition.

Out of the 800-odd locations, will it end at 100? Definitely not, but what it will get up to I don’t know yet.

It genuinely is an exciting time though. What we’re finding is the more we change the proposition the more we get better results so it encourages us to keep trying new stuff and changing things.