We have all heard the saying “Take care of the pennies and the pounds will take care of themselves”. Poundland are counting on this by dropping prices from their usual 99 pence to 97 pence in 4 stores where rival 99 pence shops have opened.
The discount superstore brand has said that it has adopted the new pricing plan for tactical reasons. It hasn’t said how long it plans to continue the new prices for. If it is successful it could be possible for it to become the new standard price point across the store’s 400 UK stores.
Jim McCarthy, chief executive at Poundland, said: ‘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.’
There is a lot to be said for the company’s marketing strategies. Unlike many companies the chain continues to show growth, which is a testament to the demand that must exist at such a price point. In the year ending April 2012 Poundland reported sales of £780million which were a massive 19 per cent higher than the previous year.