99p Stores

99p Stores Ltd.
Company type	Private
Industry	Retail
Founded	January 18, 2001; 25 years ago in Holloway, London, United Kingdom
Founder	Nadir Lalani
Headquarters	Daventry, United Kingdom
Area served	United Kingdom
Key people	Gordon Brown (chairman, appointed 2009), Faisal Nadir (Buying Director)
Products	Discount retail goods including groceries, DIY, electrical goods, toys, stationery
Parent	Poundland (since 2015)

99p Stores Ltd. originated as a family-operated enterprise established in January 2001 by businessman Nadir Lalani, who inaugurated the initial outlet in Holloway, London, followed by three additional locations within the same year. By 2002, Lalani had broadened the company's reach throughout the United Kingdom, with the chain operating 129 shops by March 2010 and catering to approximately 1.5 million shoppers weekly, pricing items one penny lower than its primary competitor Poundland. As of mid-2009, the retailer stocked over 3,500 different products.

The majority of the outlets were situated in southern England, though some extended as far north as Liverpool and Hartlepool. The chain accelerated its growth following the collapse of Woolworths Group, acquiring 15 former Woolworths premises and expanding its portfolio to 79 stores. Due to significant customer footfall, landlords considered 99p Stores a key anchor tenant.

Although the business reported a pre-tax loss amounting to £1.14 million for the fiscal year ending January 2007, consumer caution in the aftermath of the 2008 economic downturn contributed to increased sales. During this period, the retailer observed a rise in patronage from customers within the affluent AB social grade segment. Feedback from shoppers was predominantly favorable; overcrowding was frequently mentioned as a drawback but overall customer satisfaction averaged a rating of 4.5 out of 5.

In February 2015, Poundland reached an agreement to purchase 99p Stores for £55 million, with regulatory approval granted in September of that year. The transition from the 99p Stores brand to Poundland branding commenced in late 2015.

Foundation

Nadir Lalani migrated to the United Kingdom in 1973 from Tanzania, having previously managed a cash and carry business in Mwanza. After settling in the UK, he developed and eventually sold two convenience store chains, including Whistlestop Discount Stores, which comprised 27 outlets and was sold in 2005. He then ventured into discount retailing with plans for his two sons—who were also employed by the company—to take over the business. Lalani’s inspiration for launching 99p Stores came after visiting a busy Poundland location. The first store opened on 18 January 2001 and attracted more than 3,500 visitors on opening day. By mid-2009, product offerings across all stores exceeded 3,500 items.

Growth

In 2007, the firm relocated its headquarters to a modern facility in Daventry, designed to support operations for up to 120 outlets. During the recession in the late 2000s, discount retailers such as 99p Stores experienced rapid expansion; store numbers grew by 60%, with two new openings for each closure. Between August 2008 and August 2009 alone, the company doubled its number of shops and planned to double again within an eighteen-month timeframe starting October 2009 to strengthen its market position.

In August 2009, Retail Week reported that the company was assessing its ownership structure and contemplating either a sale by summer 2010 or an Initial Public Offering within three years. The retailer aimed to reach a total of 150 stores before entertaining acquisition offers and saw a potential flotation as a strategy to attract further capital while enabling the Lalani family to maintain control and equity stakes.

Management

Gordon Brown was appointed as chairman in October 2009, taking over from Peter Gent. Brown, who previously served as managing director at Wilkinson from 1991 until 2007, joined during a phase when the company was pursuing rapid expansion and considering long-term strategic options.

Sales strategy

To address the effects of inflation, the company opted to modify product quantities instead of altering prices—for instance, offering eggs in dozens rather than packs of 18. Buying director Faisal Nadir ensured a minimum profit margin of 20%. Prior to the January 2011 increase of VAT to 20%, the chain pledged to maintain stable pricing but removed items that were not profitable.

Products offered

The retailer stocked roughly 3,500 different items across categories such as DIY, electrical goods, toys, and stationery, with about 60% being branded products including Colgate, Pepsi, and Pringles. Grocery products made up 35% of the inventory and represented 40% of sales by April 2008, marking a 5% rise since earlier that year. The own-brand grocery line, 'Deli Fresh', was introduced in 2007. Profit margins on fresh produce reached as high as 40%, with popular items including potatoes, onions, and eggs. Certain products were priced under 99p, for example branded cakes at 69p and soft drinks at 89p. The Galaxy chocolate bar was among the best-selling items.

By sourcing approximately one-third of its merchandise from the Far East, the company achieved gross margins reaching up to 50%.

Store expansion

In April 2006, 99p Stores obtained an £8 million investment from venture capital firms Barclays Ventures and Lloyds TSB to facilitate opening up to 45 new outlets by early 2008. By September 2008, the retailer had launched its 59th store in Bracknell, Berkshire, and ended the year with a total of 65 stores, planning to add around 20 stores each year for the following three years.

From late 2008 onwards, the chain experienced rapid expansion, doubling its store count from 61 in November 2008 to 123 by December 2009. Owner Lalani explained that a new empty property tax on commercial premises encouraged landlords to lease spaces more readily to discount retailers like 99p Stores, enabling access to prime locations at competitive rents. Stuart Donnelly, head of property, noted that landlords actively sought out retailers due to the recession-affected property market. This environment allowed the company to grow its portfolio cost-effectively and establish itself as a key tenant driving substantial customer visits.

Following Woolworths Group's collapse, 99p Stores acquired 15 former Woolworths sites, expanding its footprint to 79 stores. The chain reached a milestone of 100 stores by August 2009 and had reopened 52 ex-Woolworths locations by December. New store launches attracted strong shopper interest, with management requesting police assistance for crowd control as customers queued early for promotional deals.

Family Bargains

In 2010, the proprietors of 99p Stores introduced a subsidiary brand called Family Bargains. Its inaugural outlet opened in Carmarthen, Wales. This brand focused on larger retail park locations and offered a broader product selection without adhering to a single price point like the original chain. The Carmarthen Family Bargains store reverted back to the 99p Stores branding in February 2012.

Customer base

A survey conducted in 2009 revealed that among the weekly customer base of 600,000 were professionals such as stockbrokers, solicitors, accountants, and doctors—indicating an increasing representation from the AB social grade. This demographic shift was anticipated to persist beyond the recession.

Certain sites like the seaside resort town of Clacton benefited from substantial tourist traffic. In August 2009 alone, the Clacton store saw over 5,000 visitors daily and frequently sold out its stock.

Competitive approach

Following the 2009 economic downturn, value and discount retailers saw substantial expansion. Although the market included various players such as independent stores and smaller chains like Poundworld, 99p Stores primarily competed with Poundland. By August 2009, 99p Stores targeted matching Poundland’s network of 223 outlets. The company emphasized offering lower prices than Poundland—for instance, selling a pack of 120 white plastic cups for 99p compared to Poundland’s 100-pack priced at £1.

Direct rivals

In June 2009, a traditional confectionery shop in Petersfield was at risk of shutting down after a nearby 99p Store opening resulted in a drop in daily revenue by as much as 60%. Utilizing its multimillion-pound purchasing power, the 99p Store was able to provide similar sweets at reduced costs by buying in larger volumes. Gerry Loughran, commercial manager for 99p Stores, remarked that the shop had previously survived competition from Woolworths’ extensive pick and mix section.

In December 2009, news from Eastleigh highlighted a new discount retailer launching adjacent to a 99p Stores location, pricing all items at 89p—10p less than the competitor. Earlier, the 99p Store had driven two nearby discount shops out of business within months. The manager of the new 89p outlet stated that their pricing strategy remained effective beyond recessionary times, reflecting ongoing consumer preference for affordable options. This marked their second store after opening in Poole, Dorset.

Financial results

The company’s rapid expansion was driven by robust sales performance, earning it the 19th position among the UK’s fastest-growing firms according to the Sunday Times Fast Track 100 in December 2006. The Grocer placed them at number 11 in their list of top independent grocery retailers.

Week ending	Turnover (£m)	Gross profit (£m)	Profit/(loss) before tax (£m)
31 January 2010	183.5		1.79
31 January 2009	113		0.333
31 January 2008	94	18.9	0.143
31 January 2007	80.8	16	(1.14)

Health and safety violations

In June 2005, Barnsley Magistrates' Court imposed a fine close to £4,400 on the retailer after frying pans sold were found unsafe. Testing by trading standards revealed handle weakness and excessive heat transfer. Upon identifying these faults, the company promptly initiated product recalls.

Later that year in October, Kingston Magistrates' Court fined the company £2,500 plus £500 costs for retailing hair removal cream lacking English-language instructions, which led to skin burns. The firm faced criticism for insufficient safety protocols but committed to introducing measures to avoid future incidents.

Sale of age-restricted products

In February 2006, following a council sting operation, the company received a £3,000 fine after employees at Acton and West Ealing outlets sold adult DVDs to a minor aged 15. A health and safety officer testified about enhanced staff training programs and in-store awareness campaigns designed to prevent similar breaches going forward.

Harassment and discrimination issues

In July 2015, the Equality Tribunal awarded €55,000 to a Polish staff member at the Dublin location. She had been compelled to work 70 hours per week during her advanced pregnancy and was assigned a 'trainee manager' position without receiving overtime compensation. The tribunal acknowledged her role as the effective store manager.

Customer perception

The general customer sentiment towards 99p Stores was favorable, with primary complaints relating to product and customer congestion and occasional cleanliness issues. Although some customers observed that rival stores offered lower prices, the overall consensus was that the merchandise represented good value. Reviews on dooyoo.co.uk averaged a rating of 4 out of 5. The strong sales recorded on the opening day of the Muswell Hill store demonstrated significant consumer interest in the brand.

Awards and nominations

In January 2013, 99p Stores received a nomination for Business of the Year at the British Muslim Awards.

External links