News • 09.08.2018

“Differentiation remains the key to growth”

Poundworld’s failure to differentiate from other discounters led to demise

Graphic of market share of top UK discounters; copyright: GlobalData...
Source: © GlobalData

Poundworld, which is set to disappear from the UK high street by early August 2018, must look to its own failures – and in particular its failure to stand out from other discounters – to explain its demise, says GlobalData, a data and analytics company.

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 Poundworld’s failure, but this is not the whole story.

Thomas Brereton, Retail Analyst at GlobalData, comments: “As with retailers across sectors, differentiation amongst the discounters remains the key to growth. One misstep by Poundworld 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 certainly played a part, with falling footfall exacerbated by a loss of Poundworld’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 rivals Poundland and B&M.

Brereton continues: “Unfortunately for Poundworld, adverse currency changes arising from the 2016 referendum hit it harder than most. Its smaller market share than B&M, Home Bargains and Poundland meant that international buying power was weak in comparison. This proved to be fatal, with its high reliance on the now more expensive overseas imports crippling its operating profits.

“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.

“However, Poundworld is not alone as macroeconomic conditions have affected numerous retailers across the British high street this year, including household names such as 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.”

Source: GlobalData

related articles:

popular articles:

Thumbnail-Photo: ISE 2024 - the future of retail
23.10.2023   #online trading #Tech in Retail

ISE 2024 - the future of retail

ISE will take place in Barcelona from 30 January to 2 February 2024

Since it began in 2004, Integrated Systems Europe (ISE) - the world's premier exhibition for professional audio visual (pro AV) and systems integration - has grown in size, strength and influence to become an industry-defining event. Every year, ...

Thumbnail-Photo: Social Commerce: Community sells?
04.10.2023   #online trading #sustainability

Social Commerce: Community sells?

Why the community approach is replacing fast delivery among customer demands and what that means for you.

For a long time it was said that fast or even "same day delivery is the key". For Fabian Mischler, this is no longer the only key to satisfied customers. In an interview, the CEO of the social commerce platform ooblee told us why community ...

Thumbnail-Photo: For you: Retail marketing calendar 2024
08.01.2024   #marketing #sales promotion

For you: Retail marketing calendar 2024

You can use these phases and days for yourself and your business in the upcoming year

Birthdays, holidays, holidays ... We record all these days in calendars every year to plan our personal daily lives. But the financial year can also be planned. This can be particularly important for retailers. You can plan ...

Thumbnail-Photo: Christmas decorations: set the scene for your store!...
09.11.2023   #customer experience #shop decoration

Christmas decorations: set the scene for your store!

From the floor to the shelves and lights to the shop window - here's how to get your store ready for Christmas!

The weeks leading up to Christmas Eve are considered to be the busiest of the year....

Thumbnail-Photo: Black Friday and Cyber Monday: Minimize mistakes, maximize success...
11.10.2023   #e-commerce #customer satisfaction

Black Friday and Cyber Monday: Minimize mistakes, maximize success

Mistakes you can avoid on promotion days like Black Friday and Cyber Monday

The promotion days on November 24 and 27 raise the sales hopes of many retailers. Despite the huge potential, these events can also be a challenge. Competition is fierce, customers are critical and expect exceptional deals. Mistakes in preparation ...

Thumbnail-Photo: Turning customers into friends - heres how it works...
24.01.2024   #marketing #online marketing

Turning customers into friends - here's how it works

WhatsApp channels as a secret weapon in the marketing mix

In fall 2023, Meta launched WhatsApp channels, a completely new feature in 150 countries ...

Thumbnail-Photo: The quiet hour – A contribution to inclusion in retail?...
31.10.2023   #customer satisfaction #customer experience

The "quiet hour" – A contribution to inclusion in retail?

Finding calm in a busy world: supermarkets make their mark

The world of commerce is constantly looking for new ways to attract and retain customers...

Thumbnail-Photo: Valentines Day marketing: creative campaigns to make your heart sing...
18.01.2024   #brick and mortar retail #sustainability

Valentine's Day marketing: creative campaigns to make your heart sing

Examples of how you can score points on Valentine's Day

Zalando killed two birds with one stone in 2021: with the invitation to "campaign exchange the clothes after your ex", customers were shown ...

Thumbnail-Photo: Veganuary 2024: Best sales strategies to reach the ‘no meat’...
11.01.2024   #brick and mortar retail #food retail

Veganuary 2024: Best sales strategies to reach the ‘no meat’

Why retailers should take advantage of the trend

Veganuary has begun its fourth year in Germany. Over 850 German companies are taking part in this global movement for a plant-based ...

Thumbnail-Photo: Tips: Optimal shopping experience for  Christmas...
22.11.2023   #online trading #artificial intelligence

Tips: Optimal shopping experience for Christmas

How to prepare for the shopping days as an Amazon retailer

The promotional days at the start of the Christmas...