SWOT analysis of Poundland (Dealz SWOT analysis)

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SWOT analysis of Poundland (Dealz SWOT analysis)

This is a detailed SWOT analysis of Poundland. It aims to examine the strengths and the weaknesses of Poundland/Dealz. It also examines the opportunities the retailer should explore and the threats it should keep a close eye on. Poundland is a British variety store chain which opened its first store in Burton-upon-Trent in 1990. Its corporate head office is in Wednesbury, the UK. It operates in the Republic of Ireland, and some other countries in the EU under the brand name of Dealz.

Strengths of Poundland (Dealz)

Poundland has over 800 stores in the UK and over 60 in the Republic of Ireland. It serves over seven million customers every week (Poundland, 2021). It offers thousands of quality products along with many well-known brands in a large number of categories. It generated 1.79 billion euros in revenues in the year ending September 2019 (Statista, 2021). It is worth mentioning that Dealz brand is also available in Spain and Poland.

Most of the items in Poundland are generally discounted even though not everything is a pound now. With the ever-current trend of saving money, Poundland entices consumers in to spend on the products and simultaneously comforts them with amazing value in their need for retail therapy.

Most items are not hard to get a hold of. If customers cannot find something in one store, they can be rest assured that it will be available in one not far from them. Also, now with many online vloggers taking customers on a virtual walkthrough of their local store, customers can see what is available before venturing out.

Poundland won a number of awards over the years. For instance, it won Discount Retailer of the Year at the 2011 Retail Industry Awards held in London. Likewise, it won gold in 2015 at the Grocer Gold Awards for its best-selling cosmetics line, Make Up Gallery (Poundland, 2021).

Weaknesses of Poundland (Dealz)

Most items in Poundland have the misfortune of looking cheap.  Likewise, many items are not always available. In fact, some stores do not always stock everything and it can be weeks before the items can become available. In addition, as Poundland focuses on cost cuttings, its profit margins are limited.

Poundland does not offer online shopping option on their website. Likewise, its core message of £1 is often in sharp contrast with the fact that some branded products are indeed cheaper at other supermarket chains. This has made many loyal customers feel betrayed which is not a good thing for the company.

Opportunities for Poundland (Dealz)

In order to appeal to the misinformed consumers who may think cheap is not quality, Poundland could consider implementing simpler colours and designs. A more minimalistic, neutral and uncluttered design concept could not only appeal to a wider demography but also save in unnecessary packaging and be more climate conscious.

Expanding into vegan and alternative diets could help consumers on a budget to adhere to their lifestyle requirements and choices and create further loyalty within consumers. The demand for vegetarian and vegan foods are growing rapidly and many retailers are propelling to capture a share of the market. Poundland should focus on it very well as well. More and more people are likely to maintain a vegetarian/vegan diet in the future. Chiorando (2021) reports that the number of vegans in the UK increased 40% in 2020 alone making it a total of 1.5 million people which is equivalent to 3% of the current population.

Poundland could lead in an area that other retailers seem to lack in currently. For example, in the diverse population of the UK, very few retailers consistently offer anything for alternative holidays and festivals. If Poundland was to consider taking this into account and offer products to appeal to an untapped market, then it would be a hugely positive step forward.

As the homeware range via Pep&Co is relatively new, it is yet to be seen how it progresses. So far, it has hit all the current trends and seems to be thriving in that area.

Threats to Poundland (Dealz)

Threat is the last element to be addressed in the SWOT analysis of Poundland (Dealz SWOT analysis). Growing competition and further lowering of prices by some competitors can impact on Poundland’s margins badly. Its main competitors are Poundstretcher, Home Bargains, Wilko, B&M, Aldi, Lidl, and many independent discount retailers.

Global lockdowns and financial crisis have already impacted on Poundland a lot. It had to close a number of stores temporarily in 2020 and early 2021 due to the lockdown in the UK even though it was allowed to remain open as an essential retailer (Munbodh, 2021). An 80% drop in footfall was the main reason for such as drastic decision.

We hope the article ‘SWOT analysis of Poundland (Dealz SWOT analysis)’ has been helpful. You may also like reading SWOT analysis of Aldi and SWOT analysis of Lidl. Other relevant articles for you are:

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Last update: 01 April 2021

References:

Chiorando, M. (2021) Number of Vegans in Britain Skyrocketed by 40% In 2020, Claims Survey, available at: https://plantbasednews.org/culture/ethics/vegans-in-britain-skyrocketed/ (accessed 30 March 2021)

Munbodh, E. (2021) Poundland to close 44 high street stores from tomorrow – the full list, available at: https://www.mirror.co.uk/money/breaking-poundland-close-44-stores-23283039 (accessed 31 March 2021)

Poundland (2021) New stores, available at: https://www.poundland.co.uk/about-us/new-stores/ (accessed 31 March 2021)

Statista (2021) Sales revenue of Poundland in the United Kingdom (UK) and Ireland from financial year 2013 to 2019*, available at: https://www.statista.com/statistics/441346/poundland-sales-uk-ireland/ (accessed 31 March 2021)

Photo credit: Poundland

Author: M Rahman

M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.