Opinion: Why is Poundworld in trouble now?

There’s no nice way of saying this. Poundworld looks bad. Its troubles are to a very large degree about what the shopper sees when entering one of the retailer’s stores.

They’re cramped, untidy and lack any real form of organisation. Yes, there may be ‘more choice, more savings’, but honestly, so what?

There are so many discounters on our high streets these days (and granted, not selling everything at a pound, but again, so what?) that shoppers want and need more than just cheap stuff. Enter Primark and Aldi/Lidl.

“On the clothing front, a visit to a Primark store is a voyage of discovery”

On the clothing front, a visit to a Primark store is a voyage of discovery, and if you’re in one of the more recent branches, the environment is as good as almost anything you’ll come across in the mid-market.

It also looks as if visual merchandising matters. Yes, at the end of a busy Saturday a Primark store has been trashed, but by the next trading morning everything appears pristine once more.

And there’s enough room between the display units that you don’t have roller cages and suchlike getting in the way of shoppers doing their thing if further replenishment is needed (which it will be).

Then there’s Aldi and Lidl. Visually, these used to be the supermarket equivalent of going to Poundworld. They were utilitarian to the point of being Stalinist when ‘five-year plans’ were in full swing.

Now they have fresh bakeries, LED-lit upright chiller units with clear glass top to bottom, and locally sourced products, as well as the cheaper goods that tend to draw in people in the first place.

Left behind

So why hasn’t Poundworld followed the discount herd and moved resolutely upmarket as far as its appearance is concerned?

It is tempting at this point to remark that being owned by a private equity company might have something to do with it, as they’re always interested in maximising revenue without the requisite cost structure. But they also tend to be keenly aware when things aren’t going to plan.

“The truth is likely to be that inertia and the hope that things will get better have carried this one along until a tipping point was reached”

No, the truth is likely to be that inertia and the hope that things will get better have carried this one along until a tipping point was reached.

Now it all looks a bit late and the stores still look bad. Better management, store layout and visual merchandising would be a start, but meanwhile, others have stolen a march.