Responding to my story last issue about the pros and cons of running a ‘pound’ shop, one of my regular correspondents, Hitendra, who trades only about four miles from me in Harold Hill, Essex, rang to say that he sort of does and sort of doesn’t. I expect that most of you fall into this category.
“The council has let a Pound Plus trade in my parade. But he opens at 10am and closes before 5pm,” he says.
This has prompted him to go to the two cash and carries in North London’s Enfield which offer ‘pound goods’. “Except these days people expect to pay a bit more than a pound,” he says.
It’s a juggling act, though. For example, Hitendra has a huge range of light bulbs. The new competition also sells them with big reductions. “But I didn’t drop my price and now sales have picked up again.”
Some things do surprisingly well. Hitendra sells kettles which the competition also sells, but customers tell Hitendra that his are £2 cheaper. And he’s making top dollar on these.
It’s always swings and roundabouts in retailing. Some lines you just have to load your margins while pointing noisily to your cheap deals.
If you want to have a look at the wholesalers offering £1, £2 and £3 lines check out www.poundzone.co.uk.
There are lots of them including Todays Group, Abra Wholesale, Landmark, Palmer and Harvey, Parfetts, Bellevue Cash & Carry, Hyperama and East End Smethwick.
Stephen Parfett, executive chairman of Parfetts, is a fan. His testimonial says: “Poundzone has been a revelation for us in both wholesale & retail. We have dedicated poundzones in each cash & carry, and have already achieved remarkable success in our own Local 4 U stores. This has encouraged us to redouble our efforts to tell our cash & carry customers about the initiative. Our success in non-food categories has encouraged us to experiment with extending the concept to traditional grocery products.”