99p store

99p Stores saw a marginal fall in gross profits

A transactional website from 99p Stores is “at least 12 months away”, according to commercial director Hussein Lalani.

The single-price discounter had revealed plans for an online offering earlier this week, but The Grocer understands this is still at the research stage and the retailer is currently “testing the waters”. Rival Poundland had been expected to become the first single-price UK retailer to launch an online offering earlier this year, but its launch window is still not clear.

99p Stores is looking to open 120 new stores, bringing its total estate to 350, and to create 3,500 jobs by 2017. Lalani said there was the potential to eventually open 1,000 stores in the UK and that expansion into the North of England and Scotland is high on the agenda. 99p Stores opened its first store in Scotland back in June.

The business revealed that EBITDA fell £6m to £4.9m for the year ending January 2013 largely due to “an investment in new stores and head office infrastructure to support future growth”. Lalani said that “substantial” cost pressures on wages and the cost of raw materials were a factor as gross profits fell by 0.28%, while gross turnover increased by 27% to £391m for the year.

“99p Stores has seen a change in its customer demographic over the last three years with 25% of shoppers now ABC1. I think we have proven that we can steal shares from the supermarkets’ convenience offerings,” said Lalani.

Despite a fall in gross profits, Faisal Lalani, MD of 99p Stores, insisted that an investment in new stores was already starting to have a positive impact: “The benefit of the added investment to head office infrastructure has begun to show positive results, especially in terms of gross margin rate, which has grown by 1.4% points this current financial year. We have already opened 16 new stores this current financial year.”