Poundland on its way to Spain

These British bargains will soon be available in Spain

British discount retailer Poundland – famed for its bargain deals of multipack crisps, drinks packs, plastic toys and low-priced cleaning goods all priced (yep, you guessed it) at a quid – has recently announced that it is set to open ten trial stores in Spain.

The arrival of a Poundland store on your local high street in the UK is often met with trepidation. Its presence – much like off-licences, bookmakers and pawn shops – is usually a fair indicator that an area is on a rather downward trajectory, economically speaking.

So does the news that the company behind the stores, Poundland Group Plc., fancies expanding to Spain spell that further gloom is on the horizon? Actually, the exact opposite could well be closer to the truth…

Since the Europe-wide economic crisis, budget and discount stores such as Poundland, Aldi and Lidl have flourished as cash-strapped consumers have sought to make their money go further. These stores have responded well to their new role in consumers’ consciousness: that they are no longer viewed with contempt or derision, but as a handy, price-conscious alternative to mid-range stores.

Indeed, in the UK, all three have become staple shopping spots for the middle class, and their proposed growth has reflected this. The boss of Poundland, CEO Jim McCarthy, told Bloomberg that he hopes to open a further 1,000 stores in the UK, expand into Ireland, and test-run ten Spanish stores over the coming two years.

The CEO did not reveal whether the Spanish stores would open in areas traditionally popular with British holidaymakers and expats, or whether Poundland will chance its arm in the Spanish domestic market. If they choose the latter, will a name-change to Euroland be on the cards and, if so, would that be wise?

As it stands, with revenues of more than €1 billion over the last fiscal year, Poundland can proudly claim to be Europe’s largest single-price general merchandise retailer – a niche market if ever there was one.

“The value retail sector has been through a period of profound change in scale, customer perception and financial performance,” said McCarthy. “The sector is now a mainstream feature of the UK retail market and Poundland has been a central architect of that change.”