Cheap and cheerful: Poundland hits London exchange

LONDON (AFP) - Discount retailer Poundland's remarkable rise in Britain was capped on Wednesday as it debuted on the London stock market - largely unnoticed by customers browsing the piles of chocolate and bottles of detergent in its shops.

As its name suggests, Poundland prices most items at £1 (S$2.10), a formula that in tough times has seen it grow to a network of more than 500 stores across Britain and Ireland.

In Brixton, an hour's walk south from central London, global big business and a slick stock market flotation was far from the minds of shoppers at the Poundland store.

The gleaming, space-age towers of the capital's financial heartland can be seen on the horizon, but inside the shop was a cornucopia of domestic goods: tea towels compete for shoppers' attention with crockery, candles, cookware and an entire wall of potato crisps.

Elsewhere in the shop, dog chews, bathroom cleaner, celebrity fitness DVDs, Mother's Day cards, garden seeds and even clown's wigs fill the crammed shelves.

Despite the low prices, brand names including Nescafe, Sony, Colgate, Alberto Balsam and Fairy are on sale.

Plenty of staff attend the narrow aisles and pop music blasts out from speakers, occasionally interjected with the cheery announcement: "Poundland - extraordinary value for your one pound." "It's the only place where if you buy something, you've actually got something in your bag for the money," Jean Farrow, 72, a retired local government manager told AFP, after she emerged with a few items in her shopping caddy.

"It is obviously a lot cheaper and you can get brand names. I think that's the important thing - toothpaste, all the basics." Poundland floated its shares on the London stock market with the operation valued at 750 million pounds.

It floated a 50-per cent stake in an initial public offering (IPO) priced at 300 pence per share, but the price soared to 390 pence as investors snapped up the shares.

Daniel Latev, head of retailing research at the Euromonitor consultancy, said pound shops had benefited from consumers managing budgets more carefully during the recession - and the fact they were no longer ashamed to go there.

"Even now as consumer confidence has improved, pound shops are still benefiting from this as consumers have integrated pound shops in their shopping routine," Latev told AFP.

"Shopping in pound stores does not carry the stigma it did a few years ago." Such stores have also benefited from taking vacated shops on high streets at lower rents.

Poundland and its rivals Poundstretcher and 99p Stores together boosted their presence by almost 500 outlets between 2009 and 2013.

They have also benefited from a shift towards more frequent and smaller shopping trips in stores nearer to people's homes, with big shopping trips to edge-of-town hypermarkets on the decline.

Mr Latev said Poundland was aiming to benefit from the trend by turning their stores more into convenience shops, by adding chilled food such as milk and other basic groceries. "The interest in Poundland's IPO is justified, even if it is not as sexy as IPOs for online retailers."