Dave Dodd: The Austerity Entrepreneur

When Dodd made the decision to leave in 2006, Poundland was employing 3,500 people across 178 stores – every single one of which was profitable. But Dodd was ready for a new challenge: “I’m not a corporate ‘step and repeat’ person,” he says. “I operate best in a dynamic, growth environment. Sitting in a boardroom surrounded by ten directors just isn’t me.”

Jim McCarthy, former managing director of J Sainsbury’s, took over as chief executive. Dodd held on to his 12.5 per cent stake in Poundland until May this year, when the business was sold. “I was due to fully exit in 2008, but look at what happened: the world fell apart. We had to wait to find the right purchaser.”

Ironically, it was during the recession that this austerity business thrived. Poundland benefited from others going bust (it claims to have got a £60m boost from Woolworths’ demise, for example). Before the downturn, just ten per cent of Poundland shoppers were from the top AB social classes. At the height of the recession, the number shot up to 22 per cent. And the single-price strategy has remained: this business is the original inflation-buster.

Analysts are bullish about growth in the UK discount sector. “Shopping-centre owners are far more willing to let their sites to single-priced retailers because of the effect on footfall, so there is capacity to expand,” comments David Gray, retail analyst at Planet Retail. Amid an uncertain economic outlook and government spending cuts, consumers will continue to look for bargains. “The round pound is regarded as an honest price point,” he adds. “Shoppers can pick up leading brands for less than at a mainstream grocer.”

Continued on page five…

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