Sun. Jun 15th, 2025
Poundland’s Price Problem:  Is the Discounter Losing its Value?

Sharon Carroll, a devoted Poundland shopper, was once affectionately nicknamed “Mrs. Poundland” by her friends due to her frequent and extensive purchases. “I’d buy so many things,” she recalls, “spending £40 to £50. When everything was £1, it was a huge draw.”

However, Poundland’s shift in pricing strategy, detailed in a Guardian article, led to a decline in her spending. The 45-year-old explains, “The product quality also decreased, and you were paying more for less.”

This sentiment was echoed by other customers interviewed by the BBC. This week, the struggling retailer was sold for £1 by its owner Pepco to US investment firm Gordon Brothers, with up to 100 store closures anticipated.

Retail consultant Howard Lake of Kantar highlights the £1 price point as Poundland’s “most compelling proposition,” stating, “Removing this identity alienated its core shopper base.”

Recognizing this, Poundland, after initially raising prices in 2017, recently announced a return to its roots, increasing its £1 or less product selection from 1,500 to 2,400 items.

Poundland operates 825 stores across the UK, employing approximately 16,000 staff. Many of these locations are former Woolworths or Wilko branches, acquired following those retailers’ collapses. Poundland became the largest occupant of ex-Woolworths stores after its 2009 administration, taking over 93 locations. In September 2023, it secured leases for 71 former Wilko stores.

These stores often served smaller towns lacking major retail presence. Retail analyst Jonathan de Mello notes, “They might have had a Woolworths, a bank, and a charity shop.” Customer loyalty in these communities proved significant. Retail psychologist Kate Nightingale emphasizes the importance of Poundland’s presence in daily routines, stating, “Presence plus reliance are key to loyal relationships, and this applies to brands too.”

However, de Mello suggests that insufficient foot traffic in some smaller locations impacted profitability. Poundland’s 2016 expansion into fashion, launching the Pep&Co range, also faced challenges. A May 2024 trading update revealed sourcing changes reduced available clothing sizes. Poundland’s wide product range, encompassing food, clothing, homewares, and baby products, created a “supermarket-general store hybrid,” making it vulnerable to competitors like Aldi, Lidl, Home Bargains, B&M, Shein, and Temu.

Poundland acknowledges past mistakes, stating, “Our missteps have been well documented… We’re looking forward to putting those missteps right.” Customers like Elinor Martin and Elizabeth Gray express their appreciation for their local Poundlands and the potential loss if closures occur.

Additional reporting by Tom Espiner

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