The pound shop is back in fashion, with widespread media coverage of the success of Poundland, which may be an indicator of a return to thrift by the UK's shoppers. The ability of Poundland, run by c-store pioneer Jim McCarthy, to stock big brands at £1 - its top selling line is Nescafé coffee 100g - "provides a halo effect for the rest of the store". On the face of it, this seems to justify McCarthy's boast that his shop is about amazing value every day. But the shopper always decides what is value and what is not and the heart of pound shops is the ability to provide "useful stuff" like backscratchers, foot long shoe horns and feather dusters that no-one knows the price of. As the Guardian sums up, the shopper may not "actually, you know, need the stuff". The pound price point is having its hour but good retailers know value is a constantly shifting target. You have to keep your offer relevant and fresh and get the price right.
True in part to my New Year resolution, I held a business meeting in an independent coffee shop today just next door to a Starbucks. The cafe was presented well and four staff were busy preparing for the lunchtime rush, at 11am. As my guests were late, I had a half hour overview of footfall on the street outside and in the restaurant. Six customers. Barely enough to form the queue in Starbucks or Pret-a-Manger just down the road. Plus one Italian girl who dropped off her CV. Some people stopped to look at the posters in the window and moved on. The owners seemed quite happy. When I left just after 1215, they were doing brisk trade. However, I have the impression that the business is not working hard enough. It could easily have managed 120 customers between 11 and 12, instead of 12. This is lost profit as the fixed overheads and staff costs are already in place. The owners are clearly busy - perhaps too busy to take time to look at the potential that their cafe has. What shou...
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