Poundworld and Discount UK to open dual-fascia store in Swindon

Discount UK fascia

Multi-price value retailer Discount UK is to open its 30th store, in Swindon, this week – under a dual fascia with its Yorkshire-based parent brand, Poundworld.

The news, flagged up by Soult’s Retail View reader Lee Sartin, links nicely to several of my earlier blog posts. I’ve previously written about Discount UK in the context of it taking over the large ex-Woolworths sites in both Middlesbrough and Newcastle, while the site of the new Swindon store in Regent Street – another former Woolworths – was covered following my visit to the town last September.

Discount UK (former Woolworths), Newcastle (4 Nov 2011)

Back then, I’d highlighted the apparently low number of retailer requirements for Swindon, and queried who might occupy the ex-Woolworths site once BHS – only a temporary occupant, while its own store was redeveloped – vacated it. Though not all the locals seem pleased, the fact that an expanding retailer is investing £250,000 in Swindon – and creating 40 jobs at the same time – surely has to be welcomed.

Former Woolworths (and soon-to-be Discount UK), Swindon (11 Sep 2011)

The store itself is set to open at 10am this Friday (24 February), and covers 14,000 sq ft: similar in size to the existing Discount UK in Newcastle. In Swindon, however, Discount UK will occupy only about a third of the space, with the remaining two-thirds housing the ‘everything for £1’ brand Poundworld.

I understand, though, that the store is being treated as a ‘2-in-1’ shop – where both brands sit within the same space under a shared fascia and frontage – rather than as two separate stores side by side.

The Discount UK portion will offer about 3,000 different products: less than the 5,000 available in Newcastle, though many of the £1 products that normally appear in Discount UK will presumably feature in the 5,000-line Poundworld section instead.

Family Bargains (former Woolworths), Bristol Galleries (22 Feb 2011)

While other single-price retailers are dabbling in multi-price formats – such as 99p Stores’ Family Bargains fascia (above), and Poundland’s Dealz outside the UK – I believe Poundworld is the first to experiment with both single-price and multi-price stores under one roof. Indeed, to date, Swindon will be only the second dual-fascia store that Poundworld has opened, following a similar one opened in Denton (Manchester) three weeks ago.

Chris Edwards Junior, the trading director at Poundworld and Discount UK, has argued that “by combining a Poundworld and Discount UK store in one outlet, we are offering our customers the best possible value and allowing them to take advantage of great offers on higher-value items over £1, that we aren’t able to sell in a purely Poundworld store.”

It’s an interesting strategy, in terms of both brand and space. With regard to the former, Poundworld’s bosses will be hoping that the presence of Discount UK encourages upselling, as customers pop in for £1 items and end up being tempted by something more expensive. On the flipside, there is a chance that Poundworld being there might scare away some shoppers who would otherwise be attracted by the (relatively) more upmarket look and feel of Discount UK.

Poundworld store, West Ealing (24 Nov 2010)

In property terms, the ‘2-in-1’ approach is significant in that it may allow Poundworld to target properties that would be too large for either fascia on its own. For example, there is still plenty of ex-TJ Hughes space available in good locations, if only Poundworld can strike the right rental deals and has the product range available to fill the space.

Even before now, Poundworld’s growth over the last few years has allowed it to mop up space vacated by a range of other retailers. As well as picking up ex-Woolies sites for both its Discount UK and Poundworld chains (such as West Ealing, above), recent acquisitions include the long-empty ex-Littlewoods in Stevenage and the landmark premises that used to house Rotherham’s Marks & Spencer. It has also been taking retail park units, including (since my one-and-only visit to date) a portion of the former Big W in Stockton-on-Tees.

Discount UK (former M&S), Rotherham (3 Nov 2011)

Openings such as these have allowed Poundworld, which was founded in 1997, to grow to over 130 stores across the UK. Discount UK, meanwhile, has seen an even more impressive rate of growth: only founded in 2010, it is already up to 30 stores nationwide.

The expansion doesn’t show any signs of abating, either: between the two fascias, the business expects to open a further 60 stores by the end of 2012. Of these, I understand that 40 are currently planned to be Poundworld shops and 20 Discount UK, though I’m told that some are likely to end up dual-branded in the mould of Swindon.

Alongside all this, Poundworld is also developing a convenience-store format, Poundworld Express, for which two shops have opened to date in Bradford and Wakefield, and a third is set to follow at 80-82 High Street in Redcar next week (1 March). More details regarding the Redcar opening are expected to be released soon, but it’s another welcome boost for a street that recently saw Store Twenty One take over a long-empty ex-McDonald’s unit and seems to be getting to grips with its empty shop problem.

Intended to “help cost-conscious shoppers beat the recession by offering a convenient ‘value’ alternative to other high street retailers”, the idea of Poundworld Express is to offer over 1,000 popular products and “household essentials” at “the purse-friendly price of £1”, making it “ideal for local shoppers looking for a low-cost one-stop shop”. Again, it’s an interesting concept that will give Poundworld almost unequalled flexibility among the value variety retailers: opening stores of 15,000 sq ft plus at one end, compact convenience stores at the other, and traditional pound shops in between.

While there are no firm numbers as yet, the company says that it “plans to roll out multiple high street locations of the new format over the next year”, and that any Poundworld Express openings are in addition to the 60 traditional Poundworld stores already promised for 2012.

So, what does all this mean for the high street? As a retailer, Poundworld is clearly not everyone’s cup of tea – and, just like any other retail use, there’s a limit to how many pound or discount variety stores any one location can usefully sustain. In the present economic conditions, however, any retailer that is opening good-looking stores with a footfall-driving product offer has to be commended.

Just as I sought to do in my Bdaily column yesterday, Poundworld’s investment in town centres will hopefully give pause for thought to those bemoaning the ‘death of the high street’. It is changing – and not always in ways that we like – but there are still plenty of expanding retailers who, happily, seem to think that the high street has a future.