Overcoming the "Pound Shop" mentality

[ToyWorldNW]

I'm not saying this is just a St Helens problem, because I know it's not, however the "Pound Shop" mentality that so many people have deeply ingrained into them today is so very dangerous for small local businesses.

In the space of 10 minutes this morning, I have heard 3 different shoppers remark that their kids could have a toy from the pound shop rather than buying the one they wanted from me - this despite me offering a range of toys starting from just 20p, and in one case the toy the child had chosen would have cost 79p from me, but £1 from the pound shop!

Yes the cheap, multiple discounters do offer some good deals, there's no denying that, but just because it's "only £1" in the pound shop, doesn't mean that it offers good value for money. So often the pack sizes are smaller, the goods of an inferior quality or quite simply £1 is too expensive for the product in question.

Add to that the fact that money spent with a small, local independent retailer will most likely remain within the local economy, and for me it's not a difficult decision. Buy local, shop independent and get better quality, better value and support not only the local business you are shopping with but also the local businesses that the owner of that retailer would then be able to shop at.

People bemoan the state of the modern high street, but if they only shop at and support the faceless national/global corporations then it should come as no surprise when the independents close their doors and only the big box shifters remain.

I'm not saying people shouldn't shop at the national chains, because without them we would barely have a high street these days and they do provide employment for a great number of people (zero-hours issues aside) as well as contributing significantly to the economy, however it just seems to defy logic that people choose to pay more for less, just because they perceive it to be a bargain! Very clever marketing, bordering on brainwashing.

 

[Paul Murray]

My nan is a keen advocate of pound shops. She was amazed to buy a hammer for £1. As soon as she tried to remove an embedded nail with it it became apparent why it was a pound.

I generally steer clear of them because the quality of a lot of the goods just seems subpar, effectively knock-off versions of better products (especially the horrible, cheap-looking toys), or as you've pointed out, not actually that good a deal as they make out.

I see a lot of the items as being disposable. In the case of the hammer, it bent after a coupe of uses, but it was only a pound. It's probably not really worth the time or effort of getting a refund or exchange for a lot of people.

I think the fixed pricing appeals to a lot of people (plus it's a nice round figure). You know you can probably get an item you need for a pound. It might be cheaper from another discount store or even a supermarket, but that's a gamble.

And do you really want to trek to a supermarket and wander round for just one item? It's much easier to pop into a pound shop, hand over a coin and be gone. I've done that on the odd occasion where I needed teabags or coffee whilst I was on my lunch. I probably wasn't getting as good a deal as somewhere else, but I was paying for the convenience.

 

[warnie]

I choose to distance myself as far away from them as possible and to be honest with you, trying not to sound up my own arse, I just don't like the customers they attract. In fact if I had to put up with the great unwashed that frequent these places then I'd shut my doors and get a job. Life's to short.

Besides that, don't underestimate the value you offer to your customers, put your prices up, buy in higher grade toys and attract a better standard of customer who comes to you for quality not quantity.

 

[silvermusic]

I choose to distance myself as far away from them as possible and to be honest with you, trying not to sound up my own arse, I just don't like the customers they attract. In fact if I had to put up with the great unwashed that frequent these places then I'd shut my doors and get a job. Life's to short.

Besides that, don't underestimate the value you offer to your customers, put your prices up, buy in higher grade toys and attract a better standard of customer who comes to you for quality not quantity.

Although mine is mainly an online business I couldn't agree more. Last December I dumped all items that wouldn't make me a minimum of £1 profit, too much aggro for too little money. Sure the number of sales have gone down, but margins are well above last year now that I can concentrate on the better more expensive stuff. It's quite funny watching my competitors running round like headless chickens hovering up any tiny sale possible.

 

[swankypants69]

Welcome to retail in the 21st century.........

 

[cjd]

Regardless, it's a high street reality now and businesses have to find ways of coping. The obvious move would be to abandon low cost, low margin stuff - it was probably not much value to you anyway, to make any money on those products you need insane volume - that doesn't often happen in small toy shops.

 

[Deleted member 226268]

I choose to distance myself as far away from them as possible and to be honest with you, trying not to sound up my own arse, I just don't like the customers they attract. In fact if I had to put up with the great unwashed that frequent these places then I'd shut my doors and get a job. Life's to short.

Besides that, don't underestimate the value you offer to your customers, put your prices up, buy in higher grade toys and attract a better standard of customer who comes to you for quality not quantity.

When Poundland starts to attract the low-life trailer trash that infests Walmart, then you know the end has come.

 

[silvermusic]

I use to go into town quite often, I rarely do nowadays. But I've always been a great people watcher in retail, pound shops are fascinating places to people watch.

 

[MOIC]

There are £1 items . . .and there are £1 items.

We supply products that can be sold in £1 shops that are great value and generally sold at between 5 to 10 times less then the RRP.

We have contracts with factories that offer us their cancelled orders (absolutely nothing wrong with the products)

The reasons for cancelled orders can include:

Different dimensions from the sample given

Different Pantone shade from the sample given.

Different component, for example wood species, that was specified in the sample. (This has no detrimental affect to it's use)

Late deliveries.

Overruns.

Wrong Packaging.

Unpaid balances.

There are many reasons . . . . . .

In all the above examples, the products are not affected as to their use, they just did not conform to the sample specifications of the sample.

These products are what to look out for in £1 shops, as the normal retail price can be up to 10 times higher.

Of course there are the normal household £1 items, which generally fill the shops, again these are good value and cannot always be seen in the supermarkets at these price points.

As in any retail business, the art is in the buying.

 

[Anglo-Amalgamated]

I don't know the toy game from a personal perspective but i do know market traders who once sold quality toys (your lower end corgis,matchbox etc) who have had to slash prices or completely change stock to compete with the poundshops.

 

[Lloyd N8N]

@ToyWorldNW - I assume the parents told their kids they could get a toy at the £1 Store, because they know the toy will cost £1.

Are your toy prices labelled well and clearly visible?

Did you say anything to the parents? Nothing wrong with a "this is only 79p" with a smile!

 

[sweet lady]

I see the same mentality with sweets. In fact I just had a customer who wanted "real dusted milk bottles" when I showed her my Barrett milk gums and she tasted one she said "mm.. nice but not real ones like from the 99p store"!!!! Then started chatting about Cadburys and Nestle not being british any more. I just wanted to shout at her to go and complain in the 99p store or poundland. I'm sure they will be quite happy to smile, give great service and make you feel like a special customer. (You are right warnie)

 

[bharris]

Asda sell (or sold in the past) a pack of bananas for £1 if you place the pack on the scales to get the price of select your own bananas its 69p. People are too conditioned into not thinking what they are doing. Why don't you put a big sign above your 79p toys and sell them for "Only £1".
We now only sell online and as mentioned earlier there is no point in low margin products and offering endless discounts. You will never make money. Every one just gives everything away for nothing its completely mad. It also takes a brave person to step away from offering everything at bargain prices and to believe in the products and service they offer. For those who do try like me might just be surprised that you may sell less volume but the money in the bank is no black and not red.

 

[tony84]

I went in to poundland the other day...I was quite impressed, not with everything but there are things in there you can get that are cheaper. Sugar, 2 bags for almost the same as 1 at Sainsbo's (I didnt buy any, but it was at the counter) or Toothpaste and save a third on the supermarket. Like any shop, there are loss leaders, things that are worth buying and things that are not. I also bought some folders, because it was convenient. They may have been cheaper elsewhere, they may not, but for a quid it was not worth me going out of my way to save 10-20p at most. So my 50p saved on toothpaste (MAY have) cost me 20p on the folders - I am still 30p up.

@warnie im not sure what you have against people like me, I go out, I work, I employ people, I pay mine and my employees taxes, I do have showers on a regular basis so generally speaking not unwashed... Or are you just being up your own arse and generalising? Lets hope none of your customers go to poundland and this gets out eh?

Personally I do not like people who think they are better than others and would rather be around someone a bit scruffy who goes out, works and looks to save a few quid wherever possible than someone who looks down on others - but hey, it takes all sorts in life doesnt it.

It is what it is, some good, some crap, some you would buy on a whim.

Oh and just an actual comparison, I bought some A4 paper from a local shop £5. At the time I thought it was expensive but I needed it so bought it. I checked the price in poundland...go on, have a guess how much. Even Sainsburys was £2.50. So as much as its nice to help smaller stores, you can not justify paying double or even 5x as much. I am sure the quality is different but the thickness was the same and its only going to get scribbled on then shredded.

 

[ldjames]

I only very occasionally find myself in a £1 shop because generally I prefer to buy quality. They have some good deals on things that are unnecessarily high priced elsewhere (like travel adapters and stationary).

I don't shop somewhere just because it's independent - and if the price is the same, I default to the supermarket - but there are some incredible independent shops near where I live. I think independent shops need two things:

1. Convenience roughly similar to a large chain (card acceptance ideally with a very low minimum, half decent website etc.) I almost never carry cash so I will actively look for places that take cards.

2. The "cool factor" - generate some local hype around your store - be part of the community and attend local events etc.

As a consumer, I don't usually care much about who my money benefits. I want a decent price/quality combination but the "cool factor" can easily replace quality and it much easier for a local shop to offer It's a bit different in business, when I value the relationship, but for a toy, I don't think you can offer that.

 

[Sarah Atkinson]

I also have the same problem with products in poundshops and other discount places, it amazes me that sometimes I can buy cheaper from a discount shop like B&M than I can at the wholesaler. It's even more difficult when people call in to ask for advice from us, to state they buy their cat food from poundland as it's cheap (I have a pet store) to keep on smiling and give them the advice they require to watch them go on their way, even telling them they can buy cheaper from me, as I sell loose food not pre packed so always works out cheaper, and the 450g bag of cat food for £1, they'd get 500g for £1 of a better quality food.
I've now started to drastically reduce the range of items that can be found in these places and in supermarkets as there's no way we can compete most of the time, so I stick to better quality products that are only available to the pet trade.
On the other hand I do shop in these places if needed, for example, back when Kobo came out I purchased a reading light from WH Smith for around £15, the batteries don't last long at all, and start dimming after a few weeks, at 3 batteries a time it gets expensive. so I found a reading light in poundland with batteries and 2 months on it's still going strong, when the batteries go I'll just go buy another light.