Friday 13 April 2012

Pound shops

Whether in the UK, shopping at Poundland or in the US shopping at the 97 cents store I have often wondered how they manage to make  profit. I had often thought that it is all about buying in volume, thereby experiencing and benefiting from economies of scale. It also made me think about the mark up of comparable goods being sold elsewhere. Whilst thinking about this I had realised that the shops had huge amounts of stock, a narrow product range, very little room in the isles, products generally poorly displayed and not many tills at the exit.

After reading the article it also made sense that there were other savings in the one price for all strategy, thereby not having to individually price which means you basically need shelve stackers who double up as checkout cashiers. Other similar stores don't provide carrier bags as you are expected to bring your own thereby keeping costs down. For more information, read here.

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