Next week, Ugo Stores should have been celebrating its first anniversary. Instead, the fledgling discount chain fell into administration this week and 18 of its 20 stores were picked up by Poundstretcher in a pre-pack deal.

The big question is - why did the chain struggle when all the other discounters are flying?

The latest data from Kantar Worldpanel shows Aldi, Lidl and Iceland all racked up double-digit sales growth in the past three months, and fellow discounter Farmfoods wasn’t far behind with growth of 7.8%.

Ugo, on the other hand, was on a hiding to nothing because it offered neither the scale to support and supply a dedicated supply chain, nor the capital to negotiate discount prices on favourable enough terms. Every initiative it promised failed to materialise.

As a result, Ugo wasn’t a discounter at all. It was just another Nisa client. And with a lot less retailing skills at its disposal than other Nisa members. And it compounded the problem by buying far too many stores in one go. It’s an object lesson in hubris. And why Ugo had to go.

Topics