Poundland appeals to the bargain hunter in all of us
The rapid growth of Poundland, which yesterday reported an 81% increase in profits, has gone hand in hand with the recession.
However, the chain’s success is more than just about saving money in difficult times; it’s part of an underlying shift in consumer attitudes, says Verdict Research.
In the year before the recession hit Poundland was a sound but unspectacular business regularly visited by 4% of all British shoppers. Today, it’s a power house of growth pulling in almost 7% of the shopping public on a regular basis.
What’s interesting is that Poundland’s growth hasn’t just come from those squeezed by the recession; it has also rapidly grown its share of the most affluent customers. For example, in 2007, only 2% of AB consumers visited the store; today, that figure has doubled and the chain pulls in just over 4% of this segment.
Certainly some of this growth has been driven by necessity, by shoppers who have needed to cut back in order to save. However, that’s not the whole picture. Poundland has been a beneficiary of the more considered consumer; the consumer who is concerned with being frugal and is willing to make the effort to shop around and find bargains.
“The success of Poundland is as much about psychology as it is about economic necessity. The recession has made it acceptable to save money; it has taken some of the snobbishness out of where we shop and has made it trendy to be frugal. That’s changing the whole nature of shopping” comments Neil Saunders, Consulting Director of Verdict Research.
Fortunately for Poundland, Verdict believes that the trend towards considered consumption is one that will endure long after the economic slowdown has passed into memory. “This is something that’s here to stay. The recession is like a retreating glacier that’s leaving behind a radically different landscape” says Saunders.
