Poundland has begun an audacious price-war by charging consumers just 97p in locations where arch rivals including 99p Stores have opened up.
Jim McCarthy, Poundland chief executive said the price drop is part of the retailer’s “competitor response” approach, which includes offering consumers vouchers promoting ‘two for £1’ or one pound off when you buy six items.
The retailer has rolled out the 97p strategy to three stores so far, including its Chelmsley Wood, East Ham and Dudley stores. All products in those stores are priced at 97p.
McCarthy said: “It is those early weeks [when a rival opens] that are very important and if you can pop the balloon early we find that doing that rather than nothing at all is helpful.
“And it sends the message that we’re not a soft touch.”
McCarthy said the 400-store retailer chose to cut prices to 97p because it was an “attractive” price for consumers. He declined to say how long the promotions will run for in each store.
“It’s a bit like when a supermarket has a competitor opening nearby. They have hosts of tactics to dampen the impact.” McCarthy added.
McCarthy declined to comment on whether Poundland’s owner, private equity firm Warburg Pincus, had put the business up for sale. However he said: “Private equity exists to buy a business and sell it on, so it’s not a surprise.”
Poundland is preparing to take-off on the continent for the first time. McCarthy said the retailer, which has over 22 stores in Ireland under its Dealz fascia, has selected which country it will launch in but would not name the location.
