Variety Stores in the United Kingdom

PROSPECTS

High rents and difficult retail environment affecting variety stores

The difficult retail environment was having a negative effect on variety stores in 2019. With high rents and revenue declining due to shrinking consumer spending, variety stores were shutting down.

Can variety stores take advantage of technology?

Variety stores display a very low level of penetration online, and technology is not generally present in this type of store. The fact that these outlets offer a huge variety of products at very low prices makes them unsuitable for an online setting, as the margins generated on goods sold would be too small.

Discounters channel a major threat to variety stores

The competition from discounters continues to be a challenge for variety stores. The weekly offer of small appliances and other merchandise by Lidl is one example of how discounters can compete with variety stores.

COMPETITIVE LANDSCAPE

Leading player B&M continues to record strong growth

B&M continued to lead variety stores and to record strong value sales and share growth in 2019. The company is expanding its store network, which already numbers more than 600 outlets.

Poundstretcher acquires Poundworld Retail’s Bargain Buys brand

Poundstretcher acquired the Bargain Buys brand from Poundworld Retail in December 2018. This followed the collapse intro administration of Poundworld Retail, which owned the Poundworld and Bargain Buys brands, in mid-2018.

Can other players use a similar model to Argos to exploit omnichannel opportunities?

One of the main retailing trends is currently consumers demanding an improved in-store experience. However, bargain stores, which sell products at very low prices, may not be able to provide the improved engagement that consumers desire, as this would squeeze their already tight profit margins to a significant extent.

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