£1 stores - Just how do they make their money?

DBT85 · 3 Dec 2011 at 06:00

anticonscience said:
How long before this happens?

Might sound nice but think about it for a moment. At the moment the average wage is what? 25k? (and I want to know what it is if you take out the top 0.5% like top sports people and so on). So at the moment a bottle of Coke is say £1.50. When the average wage is £100k a year that same bottle of coke will be nearer £6. Same with everything else. So you get bigger numbers but spend bigger numbers too.

Look at Japan for example. £1 is currently equal to 121 yen. Trouble is everything costs more as well.

What I hope is that if/when our currency gets to the stage where the average wage is £100k and a mars bar costs £2 the currency gets revalued and set back to something more sane. Otherwise it'll continue on like Japan and £1 won't even get you a "penny" sweet.

Any anyone explain for me why Japan haven't done that btw? is is just because of the cost involved?

Dimple said:
Put an unopened can of coke that is years old in my hand and I will drink it.
'Use by' is a complete load of BS.

I agree on 99% of stuff. Does it smell funny or has it got green growing on it? no? then its fine.

Efour · 3 Dec 2011 at 10:02

Nice bump.. I might try and do my Xmas shopping in a pound shop this year, im so skint

HangTime · 3 Dec 2011 at 10:54

Greebo said:
Penny sweets have disappeared now and I reckon it won't be long before the penny goes and then the two pence.

I think getting rid of 1p and 2p so everything is in units of 5p would make sense from a theoretical standpoint albeit perhaps not a practical one. Realistically nowadays nobody (consumers) worries about the cost of things with a variance of less than 5p anyway.

One problem in getting rid of the penny of course would be what happens when somebody wants to withdraw all their cash from a bank, there wouldn't be the currency to pay them if they didn't have a nice round number (unlikely due to interest).

When I was in Sweden I remember buying some stuff in a supermarket, it was weird the cost came to some random number like 93.70 but instead of getting 6.30 change from a 100 SEK note, you got 6SEK, they keep the .30. I think this is because they don't have anything smaller than 0.5SEK so you just get 'screwed over' on change.

shoes · 3 Dec 2011 at 11:00

psd99 said:
so is everything in that store a reject?

25% profit margin... they buy it for 75p and sell on for 100p?

80p

(80 * 1.25 = 100)

Less VAT though....

66.4p buying price.

IRLeetly · 3 Dec 2011 at 11:03

Pound shops are where I get them majority of my stocking fillers, also it's good for hair wax, showers gels and all that as mentioned in a previous post.

BUT remember all the older we get the farther we had to walk to school.

Ace Modder · 3 Dec 2011 at 11:23

Aod said:
the cost-price for many many goods is far far less than the retail price.

Things like consumables usually have the highest margins, of up to 375% in my experience.

You cannot get more than 99.9999999% profit margin, you can however get over 100% mark up.

panyan · 3 Dec 2011 at 11:26

chimaera said:
Probably the same reason why Sports Direct makes money selling football shirts for £25 when the official stores sell them for £40.

just out of interest, my friends dad owns soccer sport and he explained to my parents one day how they can undercut other peoples prices so much - it was very interesting but i doubt he would appreciate it being revealed on here

moss · 3 Dec 2011 at 11:46

panyan said:
my friends dad owns soccer sport

Mike Ashley?

d_brennen · 3 Dec 2011 at 11:53

I'm sure pound stores have a profit margin to make OCUK green with envy :cool:

Retromatic · 3 Dec 2011 at 11:59

Ahh pound shops, where the faint whiff of regal cigarettes drifts through the air as a selection of Britains greatest minds fight for bargains at an affordable price.

In fairness I spent 40 quid on haloween decorations in my local one this year - it's not amazing quality but did the job, recon it would have cost me at least double from other high street stores. NICE.

TheCenturion · 3 Dec 2011 at 13:52

ScarySquirrel said:
Off topic, but I was in the Chelsea Megastore just after we signed Torres, and to buy a shirt with his name and number on would have cost me a shade under £70!?!?! Crazy!

Well they need a way to recoup £50million. They're not gonna do that with his performances on the pitch

Strife212 · 3 Dec 2011 at 14:13

Todge said:
Look at Japan for example. £1 is currently equal to 121 yen. Trouble is everything costs more as well.

What I hope is that if/when our currency gets to the stage where the average wage is £100k and a mars bar costs £2 the currency gets revalued and set back to something more sane. Otherwise it'll continue on like Japan and £1 won't even get you a "penny" sweet.

Any anyone explain for me why Japan haven't done that btw? is is just because of the cost involved?

There is no subdivision of then yen. They don't have "pence". So 1 yen is like 1p.

arknor · 3 Dec 2011 at 14:26

gothic_hobbit said:
Poundland is the new Woolies

the newcastle woolworths got replaced by a bargain shop and its fantastic! it sells most the stuff you would expect in wilkos/woolworths but half the price!

theve got tons of potnoodles , heinz soups etc aswell for pretty much as cheap as morrisons sell there own brand soup for

Basher · 3 Dec 2011 at 14:53

psd99 said:
so I was in a £1 or 99p store yesterday.

they had lots of stuff there such as deodorant, shower gels to sweets, crisps to garden stuff - the actual range they have is striking but how do these places actually make their money if all items are priced at £1?

Also for instance a bottle of shower gel say lynx shower gel is £1 in there but in boots it is £2.99. I notice that the packaging is much more shiny in boot etc
but surely the product is the same on the inside?

so what do you all think?

It's fairly obvious. Reduced effort in making things look pretty, and supplying things that most people perceive should be more than a pound (but in reality can often be found cheaper elsewhere)

DBT85 · 3 Dec 2011 at 20:53

Strife212 said:
There is no subdivision of then yen. They don't have "pence". So 1 yen is like 1p.

But was there originally? Was the currency started like it is now where each base unit (yen, euro, pound, dollar) is worth precisly squat? Or has it evolved like that over the years because of inflation?

gothic_hobbit · 4 Dec 2011 at 01:18

I can remember when Poundland used to sell VHS

philip2009 · 4 Dec 2011 at 01:48

slylittlefox said:
Generally speaking, nobody is going 'direct to source' in the trade (i.e. Pound Land aren't sending envoys to China to source products as somebody has suggested ) - it's a waste of money. They just bulk buy from UK based wholesalers or buy excess/EOL stock from other retailers.

You are completely wrong about Poundland on the international front. Back in the 90s they had a permanent rep in Hong Kong (not to mention their buyers travelling around the world to source goods). They were also importing large numbers of shipping containers full of goods from across the globe (esp Asian countries).

dowie · 4 Dec 2011 at 01:53

Paul11 said:
you have to take VAT off the price

so if they sell it for £1 its actually .83p +vat

Don't mean to be a pedant but, its actually 85p + VAT...

(assuming standard rate of VAT applies to the item)

edit - actually I'm being a spaz and am clearly out of date - assumed VAT at 17.5% when its at 20% now... 83p is quite correct

arknor · 4 Dec 2011 at 01:53

gothic_hobbit said:
I can remember when Poundland used to sell VHS

same some videos were full price in hmv at the time to and needed returning but i didnt have the receipt

mrk · 4 Dec 2011 at 02:01

There are various versions down here but the best is "Family Bargains" where not everything is a pound but a lot is, it's more like a smaller Wilkinsons store but everything is priced a bit cheaper than Wilkinsons.

I picked up various branded toiletries and other stuff for £1 each there. The same stuff with the same packaging in Morrisons or Tesco would normally cost me at least £1.99 each.