More to Poundworld demise than Brexit blues
Poundworld, which is set to disappear from the UK High Street by early August, must look to its own failures – and in particular its inability to stand out from other discounters – to explain its demise, according to GlobalData.
It is easy to assume that the higher supply costs stemming from Brexit, ferocious competition amongst discounters and rising wage costs were all responsible for its troubles, but this is not the whole story.
Thomas Brereton, Retail Analyst at GlobalData, comments: “One misstep was a failure to offer shoppers a reason to choose them over Poundland, B&M or Home Bargains. Poundland is thriving on the back of its recent expansion of value clothing brand Pep&Co, and B&M is expanding into food and offering larger items such as outdoor furniture. Poundworld failed to find a unique selling point, and without it consumers were quick to switch to a retailer that did.”
Other factors played a part, with falling footfall exacerbated by a loss of the retailer’s credibility amongst consumers. Following difficulties in credit insurance, the discounter struggled with stock availability over the all-important Christmas trading period in 2017, inevitably leading to a loss of custom to Poundland and B&M.
“While Poundworld cannot be blamed for the fallout of the referendum result, it is responsible for its attempt to mitigate its impact through a poorly executed multi-pricing strategy. Its rapid repositioning backfired, leaving shoppers confused about what to expect when walking into a store,” says Brereton.
However, it is not alone as macroeconomic conditions have affected numerous retailers across the British High Street this year, including New Look and Toys R Us. "But for the seemingly impervious discounters, the loss of Poundworld will make it clear that the physical retail landscape is a treacherous one to all.”