Thursday 24 July 2014

Poundshops joining the mainstream?

Given Poundland’s successful flotation in March 2014, it is perhaps time for NAMs to seriously consider Poundshops as part of UK mainstream retail.

As a start, compare the Poundland ratios vs. the Big Four latest results.

As can be seen above, they are already ahead with ROCE 15.6%, equal on Net Margin 3.7%, underperforming on Stockturn 11.1/annum, with modest Gearing 16.1%

All they - and other poundshops - need to keep in mind are the retail standards being maintained by Walmart (ROCE 18.2%, Net Margin 5.2%, Stockturn 10.6 and Gearing 51.4%)

All a NAM needs to keep in mind is the need to help them…!

1 comment:

Martin Wood (IRI) said...

Brian by these measures you make a valid point. And in general retail terms they are a major player.

However, until Poundland (and similar bargain stores) both offer a grocery assortment capable of satisfying a reasonable "grocery shop" AND become less non-food dominated, I don't think they qualify to be mainstream grocers.

Also their share of market is still too small.

By contrast I think that the recent improvements particularly to chilled foods made by Aldi and Lidl in their UK offer, mean they most definitely now qualify as mainstream grocers.