Single price-point retailer 99p Stores is trialling the conversion of some stores to its new variety format Family Bargains.
Depending on the success of the trial, the retailer may consider rebadging all its stores sized 6,000 sq ft and above, which represents 60% to 70% of its entire estate.
99p Stores made its first conversion of a store to Family Bargains two weeks ago in Rugby, which is near its head office. It plans to convert a second store, in Wellingborough in Northamptonshire, before Christmas. This will take its total of Family Bargains shops to six, as it originally opened four in new units.
Buying director Faisal Lalani said the Rugby store was experiencing a big uplift in sales and shopper numbers since being converted. “We will convert one more before Christmas to make sure it’s not a fluke,” he said.
The chain would then consider its options in January to “digest the numbers”, said Lalani. If the two converted stores continued to trade well, options could include converting all its larger stores to Family Bargains, he added.
“It’s a possibility,” said Lalani. “It’s not something we ever intended to do, but it does make us question what would be the right strategy.”
He said its Family Bargains concept, revealed by Retail Week (June 18), opens up the retailer to a wider spectrum of customers, including those with higher spending power.
“Single price-point shops have a big pull but I think sometimes it disenfranchises certain parts of the buying public,” he said, adding that customers from social grades A and B might be more likely to shop with Family Bargains than 99p Stores.
He said the average spend was higher in a Family Bargains store than a 99p Stores shop, and that he hoped to increase this from £6 to £8 next year through more efficient supply chain management.
Lalani said 99p Stores, as well as Family Bargains, was “trading beyond our expectations” and that trading was “good overall”. Full-year profits would be up on the £1.8m figure for the year to January 31, he said.
The retailer benefits from cash-strapped customers trading down. “They used to go to Boots and now they come to us,” said Lalani.