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.
Stirlingretail 
I also think that Poundland has gone where Woollies ought to have gone. IMO Woollies was the classic ‘stuck in the middle’.
I still miss their own-brand paint – it was amongst the best of quality, but at rock-bottom poorly-perceived-own-brand prices. But, who was Wollies stocking and pricing that paint for? Surely not just for the odd middle-class DIY guy who only ever came, very occasionally, in for a specific product bargain?
I appreciate your musings on Amex and Poundland – I certainly have not yet worked out in my own mind what’s going on there. At first I speculated it was Amex after the ‘Spam Valley’ middle- class who now frequent Poundland
It reminded me of growing up in Glasgow’s salubrious Easterhouse council scheme. The brutalist-paternalistic ‘Cooncil’ had planned it so that their vast numbers of captive tenants depended on the travelling, and expensive, butcher’s van for their butcher meat supplies.
The butcher van man would regularly make barbed comments about nearby Garrowhill – a sprawling owner-occupier neighbourhood – to the effect that it was the local Spam Valley. He opined that he could sell plenty of steak in deprived Easterhouse, but that sliced Spam was his regular selling fare in Garrowhill.
That Spam Valley notion, however, does not seem to stack up with Amex. Would Amex really want to go after the purchasers of Spam, rather than the purchasers of steak?
There again, maybe the whole re-constituting what value is, extends to the Amex side of consumerism – and there is some other fundamental change that Amex has convinced itself of?
On Aldi and Lidl. My hunch is that the UK middle-class consumer has had to change. That consumer is much more prepared to buy cheap and unfamiliar and try it out and ascertain whether it is acceptable or not. That consumer in the past, was more willing to pay for a trusted brand.
It will be interesting to now see if the middle class consumer is willing to more permanently trade-down and compromise a little on, say, taste. That reminds me of back in the mid 90s reading about the highly respected Chief Exec of Heinz admitting he was afraid of the damage that the-then arriving supermarkets own-brands could do to his sales. He was worried about the consumers’ willingness to compromise just that little on quality and taste.