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UK-style 'pound shops' launch in crisis-hit Spain

The Local Spain
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UK-style 'pound shops' launch in crisis-hit Spain
Alicante town hall officials open the first Dealz store on the Costa Blanca.

The UK chain Poundland has entered the Spanish market with its formula of top-brand products at rock-bottom prices now available in Alicante, Torremolinos and, as of Friday, Madrid.

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Anyone living in the UK or Ireland will be familiar with Poundland, the high-street store which always has a tempting offer or two with all products on sale at just one pound. Now, under the name Dealz, Poundland is bouncing into the Spanish retail market at a time when millions of Spaniards are watching every cent after six years of economic crisis and austerity.

Having opened two shops during the summer in Torremolinos and Alicante, both cities with large British ex-pat communities, Dealz on Friday opened its first outlet in Madrid, the daily El País reports.   

READ ALSO: Revealed – the cost of expat goodies in Spain

But what about the all-important fixed price? Everything will be on sale at €1.50 (which is equivalent to 1.18 British pounds at the current exchange rate, or $1.89), despite the fact that Dealz, like Poundland, stocks well-known brands.    

"Spaniards have been turning to own brands in search of low prices. But we think that what the consumer wants is to return to their old familiar brands so we believe we have a great opportunity to develop here,” Dealz director in Spain, Álvaro Villamizar, explains.

The chain plans to open 10 stores in its first year, creating some 500 jobs in the process.

The concept of a shop with fixed bargain prices is not entirely new in Spain, where, before the adoption of the euro as the official currency in 2002, there were many outlets selling cheap goods under the banner of “todo a 100” (everything 100 pesetas).

Poundland, launched in Britain in 1990, chose Spain as its first continental European market having moved into Ireland in recent years. "We carried out a broad market study looking at all the possible countries we could move into. And Spain always came out on top,” says Villamizar.

But how do they keep prices so low? Villamizar is adamant that the store never sells at a loss: “That would be illegal,” he says. The answer lies in the volume of goods the shop sells, meaning that it can offer providers large and stable orders. Also, in the cases of some well-known brands, the size of a product may be smaller than in other retail outlets.  

Dealz stores in Spain are to open from 9am to midnight, including Sundays.  

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