LONDON (Reuters) - British single price discount retailer Poundland on Tuesday launched a trial online service, looking to tap further into ever-increasing consumer demand for cut-price offers.
Poundland, which in August got the go-ahead from regulators to buy rival 99p Stores for 55 million pounds ($85 million), will make more than 2,000 products available for UK shoppers online, with no minimum order and a flat 4 pound delivery fee.
Orders over 50 pounds will be delivered for free with all customers receiving their goods within 4-5 working days.
“The online shopping market is a rapidly growing channel and one which could provide a significant potential opportunity for us,” Poundland’s Chief Executive Jim McCarthy said.
Value retailers have been cautious about launching online due to the costs involved in providing the service and handling returns, for example.
The firm, which has over 500 stores in Britain and Ireland, where it trades as Dealz, and is running a trial in Spain, has been looking at launching online for the past couple of years and joins rivals such as Poundworld and Poundshop.com.
Plans to launch a click and collect service could follow if the trial proves successful.
With recession-era shopping habits entrenched, discount retailers, in general merchandise and food, are taking sales from Britain’s “big four” supermarkets: Tesco, Asda, J Sainsbury and WM Morrison Supermarkets.
Historic results show Poundland has performed well in austere times but done even better in times of economic growth, with nearly a quarter of its customers now drawn from the more affluent “AB” demographic.
Shares in Poundland, up 8.4 percent on a year ago, were down 0.6 percent to 343 pence at 1200 GMT.
($1 = 0.6514 pounds)
Reporting by Neil Maidment