In for a penny, in for a pound... well 97p

Posted by Jessica Searle in Credit Crunch on 5 June 2013 - Jessica worked as a Credit Analyst at checkmyfile until 2013

With many households tightening their belts in these hard times, there has been a distinct rise in discount shops upon the high street, while many seemingly well-established stores have closed.

With fierce competition emerging from the growth of alternate discount chains, the current high street favourite Poundland has made a U-turn in their business plan, reducing items in four stores to only 97p.

In the year ended 30 April 2012, Poundland posted a continued growth in both sales and profits. Sales were £780m, up 19.3%, and pre-tax profits were generated of £18.3m, up from £12.2m in the previous year.

Yet despite this, in some areas where rival 99p stores have opened, what was once thought to be an immovable price structure has seen Poundland prices drop to 97p.

Another strategy being employed by Poundland is the introduction of vouchers entitling customers to 'two for £1', or one pound off with a purchase of 6 items. This move has been attributed to 'tactical' reasons.

Jim McCarthy of Poundland says, “Poundland always aims to offer great quality products for amazing value to all its customers... Like all retailers we test competitor response options all the time and this is just one of a number of tactical options. This price point is currently being applied in just 4 stores.”

It has declined to confirm how long these promotions will run for. Trade magazine Retail Week reports that the 97p promotions have already been running for over a year.

The rival 99p store has now opened 224 branches in England, Wales and Ireland. Hussein Lalani of the 99 store says that Poundland's decision to reduce its prices is “a great compliment to and affirmation of our 99p Stores Brand... it illustrates what an impact we must be having on Poundland that they have had to change their business model.”

As a thank you, Mr Lalani has confirmed he shall be sending a case of 99p “bubbly” to Poundland’s chief executive.

The move to discount prices at Poundland may also be attributed to recent bad publicity from the Channel 4’s “Dispatches: Secrets of Poundland”, where the retailer was accused of shrinking products in order to maximise profits, among many other marketing and packaging tricks used to encourage shoppers to spend more money.

So is the Poundland bubble about to burst, or is it like many other retailers in this tough time, having to adapt in order to maintain their presence upon the top of their market?

Jessica Searle is a Credit Analyst at checkmyfile and has a degree in English Literature from the University of Exeter. You can contact her at

IMF concern for Britain and economic recovery

The International Monetary Fund (IMF) is concerned that Britain’s reliance on credit cards and loans could stunt economic growth and put the past five years of recovery in jeopardy. The UK is currently on a warning list of countries that would be vulnerable to an economic crunch and the UK now has one of the highest household debt figures in the developed world.

Published on 17 Apr 2015 by Paul Anderson Riley

Full Article

UK economic growth rises to its highest rate since 2006

The UK economy expanded at a faster pace than expected last year, giving the coalition government a welcome boost ahead of May’s general election.

Published on 7 Apr 2015 by Simon Hadley

Full Article

UK inflation rate falls to zero in February

The rate of inflation hit 0% in February - the lowest reading since records began in 1988 according to the UK’s mechanism for recording inflation, the Consumer Prices Index (CPI). In January, the CPI recorded a reading of 0.3% and analysts expected it to drop to 0.1% in February. However, a continued supermarket price war, low oil prices and cheaper toys and books attributed to the greater than expected decrease.

Published on 26 Mar 2015 by Tom Line

Full Article

Wealthy people live longer, healthier lives

Women living in more wealthy areas can expect to see an additional healthy lifespan of almost 20 years to those living in deprived areas, research has found.

Published on 10 Mar 2015 by Kelly Luff

Full Article

Household income has returned to pre-recession levels

Household incomes are “finally strengthening” according to the Institute for Fiscal Studies (IFS), in spite of the slowest recovery post-recession in recorded history.

Published on 6 Mar 2015 by Ben Tumilty

Full Article

UK wages predicted to rise above inflation

For the first time in eight years we’ll see our wages rise above inflation, according to a study. The Ernst & Young ITEM Club report has predicted that there will be a pick-up in pay growth to 1.9% in 2015, amid low inflation.

Published on 24 Feb 2015 by Kelly Luff

Full Article

Global debt rises to $199tn

Global debt has risen by $57tn since 2007, a new study has found. The McKinsey Global Institute research found that the current worldwide debt stands at $199tn, the equivalent of 286% of GDP. Government debts are the single biggest contributor of the increase, with government indebtedness increasing by $25tn.

Published on 9 Feb 2015 by Kelly Luff

Full Article

UK unemployment continues to fall

Unemployment across the UK has fallen to its lowest level for more than six years. In the three months of September through to November 2014 the number of people out of work fell by 58,000 to 1.91m. Figures from the Office for National Statistics (ONS) show that the unemployment rate now stands at 5.8% whereas it was 7.1 % the same time last year.

Published on 23 Jan 2015 by Tom Line

Full Article

Credit unions as a viable alternative to payday lenders

A new cap on payday loans was introduced in the New Year, meaning that all short-term credit will now capped at a daily rate of interest at 0.8%. Default charges cannot exceed £15 and the maximum amount paid back will not exceed twice what was borrowed.

Published on 20 Jan 2015 by Rebecca Stains

Full Article

Falling inflation due to food and petrol prices

A fall in petrol prices and reducing supermarket bills has seen the UK inflation rate fall to the lowest level since records began in 1989. In November 2014 the Consumer Price Index (CPI) measured inflation at a rate of 1%, falling to half of this in December 2014 (0.5%). The CPI, the government’s preferred measure of inflation, has only been at 0.5% once before in May 2000. A fall to 0.7% was expected by economists but the fall to 0.5% took the city by surprise.

Published on 16 Jan 2015 by Paul Anderson Riley

Full Article


We are rated number 1 for customer service on