Poundland ‘bargains’ up to 50% more expensive than items sold in big supermarkets new research shows
By Jennifer Newton for MailOnline11:47 19 Apr 2015, updated 19:18 19 Apr 2015
- Certain products at retailer are more expensive per unit than supermarkets
- Comes as Poundland announced sales exceed £1bn for first time last year
- Company’s success has been put down to shoppers hunting for bargains
Items on sale in Poundland are sometimes up to 50 per cent more expensive than those sold in supermarkets, new research has shown.
The budget retailer last week announced that sales exceed £1billion for the first time last year becoming Europe’s largest single-price discount retailer.
The company’s success has been put down to shoppers hunting bargains and taking sales away from Britain’s four big supermarkets, Asda, Tesco, Sainsburys and Morrisons.
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But according to research in the Sunday Times, shoppers in Poundland are being charged more per unit of certain products compared with bigger retailers.
The research points out that at Poundland shoppers can buy a 250g box of Kellogs Cornflakes for £1, while at Tesco they can buy a 750g box of the cereal for the same price.
A bag of Galaxy Minstrels with a weight of 105g also costs £1 in the shop but a bigger bag at at 153g can be purchased in Asda for 98p.
Equally two pints of mile cost £1 in Poundland, but shoppers can get four pints in Asda for 89p.
Also a pack of six Tunnocks Tea Cakes is 81p in Tesco, compared to £1 in the budget brand.
Originally founded by entrepreneur Steve Smith in 1990, the company snowballed from a small private enterprise into a High Street revolution, which involves buying up unwanted stock and end-of-lines, then swiftly getting them into the shops to sell cheaply.
However, the research does point out that there are still many products cheaper at Poundland compared to other supermarkets.
These include a Fray Bentos steak and kidney pie, which is £2.20 in Sainsbury’s and a 24 pack of Jaffa Cakes, which are £2.29 in Tesco.
However, a spokesman for Poundland told the newspaper: ‘We conduct price surveys every two weeks against the supermarkets and we believe we are 40% cheaper or more against 1,000 branded products. Comparing either supermarket promotions or larger pack sizes with our prices isnot a meaningful comparison.
‘Promotions are temporary and with larger pack sizes you have to spend much more to get any better value. On a like-for-like comparison Poundland’s value, across our whole range, is compelling.’
The company’s discounting strategy has since been adopted by bargain chains such as Aldi and Lidl, all of which have eaten into a market once dominated by the supermarket chains such as Waitrose, Tesco and Sainsbury’s.
Back then, shoppers were beginning to desert the High Street for superstores, but Mr Smith and his Poundland chain – which he sold in 2000 for £50million – were a lifeline that helped keep it afloat.
Poundland said it had opened 60 new stores in the UK and Ireland and had a strong pipeline of openings for the new year.
Meanwhile the retailer warned on Friday it may walk away from its planned £55 million acquisition of rival 99p Stores rather than be subject to a lengthy probe by the UK competition watchdog.
Britain’s Competition and Markets Authority (CMA) said last week the agreed deal could result in a substantial lessening of competition and would be subject to a further investigation in the absense of undertakings, such as selling some stores.
The company said in a statement: ‘Poundland has decided not to offer remedies to the CMA’, adding it had written to the regulator to request a Phase II review be suspended for three weeks. Such a review could take as long as six months.
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