The cash will help the chain grow from 20 stores to 70 with a turnover topping £150m in three years, said Lalani, who set up the chain in 2001 after selling Whistlestop to Compass Group.
With more than a third of its sales generated by food, 99p Stores was starting to shift significant volumes in snacks, confectionery, cakes and biscuits, he said.
“We can’t get the deals buying direct from manufacturers, so we typically get brands such as Typhoo, Mars, Coca-Cola and Tetley through third parties such as Crown Crest, Prima and Freeman Confectionery.”
A contractor packs goods into unusual pack sizes for the chain to meet its 99p price point, while goods are distributed through warehouses in Dunstable and Staples Corner.
Business is booming, with like-for-like sales growth topping 25% over the last year, at least 70% of customers visiting more than once a week and average basket spend £4.
One of the company’s most successful stores was a 3,000 sq ft store in Seven Sisters Road in Holloway that used to be a Sainsbury’s Local, said Lalani. He added: “Sainsbury couldn’t make it work. People wanted something cheaper.”
Barclays Ventures provided £3m in return for a minority stake in the chain plus £2.7m in debt. Investment director Khilan Dodhia said: “We expect 99p Stores to be among the market leaders in the high growth value retail segment.”