Discount stores are right up your street

SCOTLAND’S high streets are being taken over by discount retailers as chains such as Poundstretcher cash in on cheap, post-recession rents.

Leafy Milngavie is the latest addition to the Poundstretcher stable, while other discount retailers have recently snapped up prime sites in Glasgow and Stirling.

As the retail face of Scotland changes, property firm Ryden, which is leading Poundstretcher’s aggressive expansion north of the Border, said the firm was looking to secure leases on a number of key high street sites, many in affluent areas. The company warned that the peak of the discount retailing wave was yet to come.

The value chain, which has plans to open another ten to 15 stores in Scotland over the coming months and is currently in negotiation over six new leases, is taking advantage of lower rents in the wake of the credit crunch.

Recent figures have shown that three stores a week have been closing in Scotland since the turn of the year, leaving many prime retail units empty for months at a time.

Rival Poundland has also expanded – snapping up prime positions on Glasgow’s Argyle and Sauchiehall Streets earlier this year, while bargain chain B&M is due to announce a deal at a city centre spot in Stirling. Key locations on major high streets are increasingly cheap as retailers go out of business and landlords struggle to find new businesses to let the sites.

“There are some good deals around,” said John Conroy, retail partner at Ryden. “It comes down to getting the right site. There are plenty of retail units about where perhaps it is taking a while and the landlord is happy to consider some fairly soft terms.”

In Milngavie, the size of the 4,300sq ft Poundstretcher shop is second in the town only to upmarket department store Marks & Spencer.

Poundstretcher alone has opened 40 new sites in the UK in the past year.

Eve Gilmore, spokeswoman for ‘We Like Milngavie’, a group set up to protect the town’s high street from giant superstores, said she believed the current mix of discount and upmarket stores in the town was good, but warned that any further move towards discount retailing could be detrimental to the town’s independent delicatessens and boutiques.

Liz Cox, of the New Economics Foundation think-tank, warned that discount retailers could ultimately oust independent stores.

“If your intention is to have a thriving economic centre which is part of the community then you should have serious concerns about the impact at a local level that these kinds of shops have,” she said. “These discount stores have the same kind of business set-up as the multiples which dominated the high street pre-recession and that would have the same long-term impact.”

She added: “You have to look not just at the high street but on whether a new business will have any effect on the local supply chain, sells goods from local businesses and whether it has a high level of employment per square foot. These kind of shops are not likely to do so.”

But some business specialists argued that discount stores – which are often doing better business than more upmarket retailers – are keeping Scotland’s high streets alive.

Graham Bell, spokesman for the Edinburgh Chamber of Commerce, said high streets welcomed any business which could fill empty retail units.

“What you have to remember is that any retailer in an empty unit is better than none,” said Bell.

“And if you go into these stores, they are heaving. Certainly, in the recession, people are looking for good deals, but some of these value businesses are doing very well and have a healthy turnover.

“Edinburgh, for example, might have an image of itself as a well-heeled town, but there are more and more people on low incomes and who don’t have the chance of buying upmarket.”

Leigh Sparks, professor of retail studies at the University of Stirling, said: “The problem is that the “Pound” branding of some of these stores distracts people a bit. What we are actually seeing is chains of shops which do what Woolworths set out to do when it first launched.”

Poundstretcher and Poundland took over a number of Woolworths’s stores following the collapse of the chain three years ago.

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