Summary
Several discount stores in the UK, including Poundland, are closing shops despite a cost-of-living crisis. Rising costs, increased competition, and changes in shopper behavior are making it difficult for these budget stores to thrive. Poundland, sold for a nominal amount due to tough trading conditions, plans to reduce its number of stores as part of a restructuring plan.
Key Facts
- Poundland closed its store in Peckham, London, and plans to close more as part of a store closure program.
- More than 100 Poundland stores are set to close since the business was sold in June for £1.
- Poundland aims to reduce its stores from around 800 to between 650 and 700 by the end of its turnaround plan.
- Other discount stores, like the Original Factory Shop and Maxideal, are also struggling, with some closing stores or shutting down entirely.
- Retail expert Catherine Shuttleworth notes that consumers are changing how they shop for bargains, becoming more selective.
- Rising employer costs and inflation are creating financial difficulty for discount stores that traditionally rely on low-priced goods.
- The concept of a "pound shop" has become tougher to sustain due to inflation and increased operational costs.
- Chris Edwards, behind the creation of Poundworld, noted the shift in business strategy due to challenges in maintaining the "pound" pricing model.
