Poundland's plans to launch an online delivery service next year represents a "massive step" for the discount retailer, but one fraught with risk, a leading industry analyst has said.
Nigel Frith, senior market analyst at www.asktraders.com, was commenting following the unveiling of the retailer's Project Diamond, which will see it pilot a home delivery service via its Poundland.co.uk portal, as well as develop larger 'destination' sites.
Taking A Punt
"With Poundland trialing a home delivery service next year, this is a massive step for them - but obviously with the change, comes risk," Frith wrote in a briefing note. "What if this doesn't work? What happens if the chain is going to have to make redundancies or cut jobs as a result of the pandemic? All these questions need to be answered and trialed before they offer a full-time delivery service.
"Adding to this, Britons on lower incomes rely on cheaper stores such as Poundland, so launching a delivery service is no use if the brand hikes up their prices to not suit customer satisfaction needs."
At the same time, however, Frith suggested that this could be an opportunity to bolster its workforce, and tackle a looming unemployment crisis.
"On the other hand, this is a chance for Poundland to make new jobs as they are going to need drivers to deliver the goods, and especially with the climate we are currently in that is definitely a positive change. If this trial goes well, perhaps other big retail names could follow in their footsteps".
Commenting on the launch of Project Diamond, which will also see Poundland roll out more stores in the UK and Ireland, Barry Williams, Poundland managing director said, "We're stepping up to support high streets after the impact of the coronavirus by being customer-focused, people-led and tech-enabled.
"This is the biggest transformation in our history as we look to secure our future for another 30 years."
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine