If you thought your local high street was already dominated by discounters, it could get worse. Home Bargains has announced plans to open 400 stores over the next five years - more than doubling its existing portfolio.
This may not be good for some towns' aspirations, but it may offer relief to some small shop landlords. The expansion of pound stores and discount fashion brands has been one of the few high street growth stories of austerity-struck Britain. A report this summer by the Local Data Company (LDC) and the Oxford Institute of Retail Management found that the number of value retail outlets - second hand, discount or charity shops - had risen by about 1,100 or 12.4 per cent in just two years to make up 9 per cent of the national total.
Poundstetcher, which currently has about 400 stores, announced 23 new openings in July. Tellingly, five were acquired from Dreams, three from Comet and three from Blockbuster - all retailers that have gone bankrupt. The company has said it wants 500 stores by March 2015. Poundworld has also laid out ambitious growth plans, with a target of 200 store openings over five years.
More upmarket retailers have spent the past few years trimming their store portfolios to focus on their most profitable outlets - typically those in cities or big malls. The LDC-Oxford report found that the number of women's clothing shops in Britain had shrunk by 6 per cent for independents and 13 per cent for chains, for example.
This trend has precipitated sharp falls in rents, boosting discounters' margins and allowing them to expand. A recent report on out-of-town retailing by property broker Knight Frank reports that B&M, another discounter, pays just £11.71 per square foot across a 91-store sample - "much lower than for the more established operators that expanded before the recession".
The expansion of discounters, who are known for negotiating hard on rent, may therefore be something of a double-edged sword for landlords. It protects them from the often exorbitant cost of empty rates, but also exerts downward pressure on rents and property prices.
