Déjà vu as Poundstretcher sells surplus Woolies-branded stock
Wandering around the variety store Poundstretcher in Hexham yesterday, I was understandably surprised to spot lots of Woolworths-branded products on the shelves, including – among many other things – Worthit DVD players and laundry baskets.
Presumably, Poundstretcher has snapped up surplus warehouse stock that would have been destined for Woolies, had it survived. It struck me as quite ironic, given that Poundstretcher put its weak performance over Christmas down to competition from Woolworths’ clearance sale – selling off those same products that can now be found in Poundstretcher.
Even before this interesting twist, I’ve always thought that Poundstretcher – aka Instore – has a great deal in common with Woolworths. Beyond the obvious fact that both have similar product ranges (homewares, confectionery, gardening, Christmas decorations and the like) Poundstretcher has recently had a frustrating Woolworths-style habit of underperforming, even when the economic climate has suggested that a price-focused retailer should be doing well.
Another common feature is that Poundstretcher, like Woolies before it, seems to struggle to offer a consistent customer experience. While some Poundstretcher stores, such as Gateshead’s Team Valley superstore, are spacious and well organised, the smaller branches, like that in Hexham, often seem tired and cluttered.
A third shared attribute – and one where Poundstretcher may even trump Woolies – is in failing to build an understandable and meaningful brand. Since 2005, the business has had an identity crisis. First it began to rebrand its Poundstretcher estate under the new Instore fascia; then, in 2006, decided instead to trade under both names; and now plans to scrap Instore all together, rebranding all those stores back to Poundstretcher. Combine this with Poundstretcher having at least three different logos in active use, and there’s no wonder that shoppers should be confused about what, if anything, the retailer and its brand stand for.
Recent announcements suggest that trading at Poundstretcher has picked up, but that – ominously – “the board does not regard this as indicative of a turnaround in the company’s overall situation”. Woolworths may be gone from the high street – if not from the shelves of Poundstretcher – but as value competitors such as Home Bargains, B&M Bargains and Poundland expand aggressively to fill the gap left by Woolies, Poundstretcher will need to work hard to build a truly distinctive offer and brand.