Today’s news that Poundland would start taking American Express cards certainly caught my eye.
Most of the media coverage that I saw seemed to focus on the symbolism that Amex in Poundland held for the state of the British high street and the poverty of the middle class. Such is the concern over money, they seemed to say, that the middle class are being forced to shop at Poundland, so Poundland has to take Amex.
I am not sure I get this line of argument.
Poundland are a strong and interesting business. For me they represent something of where Woolworths should have been heading – and they certainly benefitted on site terms from the demise of Woolies. The model is developing, has major manufacturers on board, is in better and more sites, and is hitting the spot with a broader range of customers. What’s not to like?
They also reflect not only the changing high street but the alteration in retailing generally. Look at the recent figures from Aldi and Lidl and I see Poundland in the same light. British consumers have begun to recognise and re-evaluate where value is to be found and some of the old perceptions are being destroyed. A recessionary issue – sure. But only a recessionary issue and therefore (hopefully) transitory – I don’t think so.
The marriage of the British consumer and the value end of the market continues to develop,
So, where is Amex in this? Far from Poundland needing Amex, I wonder if the story is the other way around? “Middle classes” going to poundshops and being careful of their money, seeking value in all places is a growing trend. But why is Amex the driver of this, or even necessarily involved? Isn’t it the follower here and doesn’t this say more about Amex than Poundland?
What is the value in having an Amex card as a consumer given the changes to credit availability and desirability, numberous debit and other payment options (including cash) and the internet destruction of some of the previously differential add-on services? What does it add over and above anyone else’s card?
It strikes me that today’s announcement points to more than one business model being challenged by the changes underway.