Poundland and 99p Store - the shopper implications
2 September 2015
The competition watchdog has provisionally cleared Poundland’s £55m takeover of its rival single-price retailer, 99p Stores, arguing that there are enough value chains vying for customers to allow the deal. Stage 2 of the approval now set to take place before final approval (there are c.80 ‘overlapping’ stores) but it's looking increasingly likely to happen. The deal will see Poundland pay £47.5m in cash, and offer new Poundland shares worth £7.5m.
Poundland, which currently has 500 outlets, is set to take ownership of 251 stores trading as 99p Stores or Family Bargains. Poundland intend to re-brand the stores as Poundland. Best practise will be taken from Poundland and applied in 99p Stores (wider FMCG range, recent investment in customer service etc). Meanwhile, 99p Stores will reduce the need for organic expansion, allowing Poundland to further improve its current offer and focus on overseas expansion.
But what does this mean for shoppers? From a geographic point, the acquisition of 99p Stores will accelerate Poundland’s ambitions to expand in the south of the UK. 17% of shoppers in the South East and 29% in the South West would “go out of their way to get the best deal/cheapest price.”
Take a look at our mini report below to learn about the deal and shoppers at Poundland and 99p Store.