With the mission of becoming the predominant value brand in the UK, Poundland has embarked on an impressive expansion programme. Currently trading from 121 stores, Europe’s leading one price retailer has identified a number of huge growth areas.
Poundland is currently commissioning a second custom-built distribution centre which will increase its total warehouse capacity to 48,360sq m and is planning to open 30 new stores every year. The sales for 2005/6 are expected to be in excess of £350M which is equivalent to more than a 20% increase compared to previous years. To support these key growth objectives, Poundland has taken several innovative steps ranging from enhancing its customer contact skills to implementing the latest in IT solutions for planning, merchandising and distribution.
Poundland has partnered with JDA Software to implement new merchandising, replenishment and warehousing software, specifically Portfolio Merchandise Management System-I (MMS). George Oldridge, IT Director at Poundland, explains: “JDA software gives us a powerful new management tool and allows our stores to have instant access to better information at the touch of a button. For the first time, Poundland can accurately measure what’s being sold, what’s left on the shelves, and what’s left in stock.” Selling everything from shampoo to screwdrivers, Poundland offers around 4,500 products in any one store and has a very high stock turnaround. With the varied mix of planned / opportunist and seasonal buying the product set changes very rapidly.
According to Oldridge, the 300 million units sold annually – for a pound – makes the stock management process quite a challenge.
After rolling out Point of Sale Technology in all its stores last year, Poundland wanted to extend its investment in technology. The retailer turned to JDA to help overcome the complicated process of keeping shelves fully stocked with the right product in the right place at the right time.
Oldridge says: “Our buyers have a great instinct for product selection and source great products. But as we grow larger, the need to plan purchasing to ensure that demands are properly met and sales opportunities optimised, are becoming increasingly important.
“We obviously want to be stocking what the consumer wants, as well as preventing all of our store managers from having to spend a few hours every day ordering products. Now we have an automated system in place that proposes the most appropriate products to order to satisfy sales requirements, allowing them to focus on serving customers.” Oldridge notes that “for the first time Poundland has accurate and complete information on which to base tactical and strategic buying and promotional decisions. MMS then supports the implementation of those decisions providing visibility and tracking from raising supplier orders, through the shipping process to delivery at Poundland, and on to automated product replenishment to make sure shelves remain correctly stocked”
He also uses the example of introducing new lines in the Spring, and claims Poundland should be better prepared than ever. Just as soon as the fastest selling items like flower pots are fast disappearing off the shelves, popular batteries or crisps will fill the gaps, depending on the exact location, date, and what the merchandising system is telling them.
“The key is to avoid ending up with stock you either can’t find, or can’t sell,” he says. “Poundland now has an integrated end-to-end stock management solution that provides us with accurate stock visibility throughout the supply chain. Using sales data with automated replenishment will ensure that we always have the right product, at the right time, and in the appropriate volumes, giving rise to improved customer service and increased sales,” concludes Oldridge.
Poundland at a glance:
- The company has 4,000-plus employees.
- It operates as a single price retailer.
- Poundland has 121 stores.
- The company’s 2004 revenue was £245M.
- It sells about 300 million units annually.
- Each store holds 2,000-plus products.
- Brands sold include Cadbury, Walkers, Nestle, Cussons, Radox.