99p Stores are quids in

99p Stores' profits leapt from £1.8m to £6.3m last year. It seems even Middle England now sees the value in budget stores...

by Dave Waller
Last Updated: 06 Nov 2012
Pre-tax profits at the value retailer jumped from £1.8m to £6.3m in the year to the end of January, a period in which turnover hit £231m (up from £183.5). Given the current climate – not to mention the VAT hike - that’s an almost supernatural performance for the retailer, which will flog you unglamorous fodder like multipacks of cheese Quavers or three cans of Adameat beef in jelly dog food and still give you change from a quid.

And given the level of expectation on the high street for the rest of the year, we can’t imagine its fortunes dropping down the back of the sofa any time soon. Having started as a single store in London in 2001 and expanded through buying up defunct Woolworths shops, 99p Stores now has 144 branches and hopes to open another 31 in the next seven months.

But its success marks something more than just a corporate expansion; it also provides a handy illustration of how tightened purse-strings can affect punters’ perceptions. According to boss Hussein Lalani, store openings in the Cotswolds, the New Forest and St Albans prompted protests on Facebook and newspaper letters pages from locals wanting to protect the tone of the area. He reckons they also had isolated claims from Bishop Stortford businesses that ‘the town is too "posh" for us’.

But that’s all changed now. ‘We have had shoppers from all sectors of society beating a path to our door,’ said Lalani. ‘Value has no class boundaries or borders.’

Indeed, it’s amazing what a little economic pressure will do to airs and graces. Aside from the booming luxury goods markets, mopping up at the less constricted end of the economic scale, budget outlets like 99p Stores, Lidl and Aldi are conspicuous by their apparent immunity to the general high-street gloom.

As for the future, 99p Stores are opening in Ireland later this year. Having tested the single price-point concept there, it will then open across the continent. Now what could’ve given Lalani the idea that budget stores could work there?

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