99p Stores started out as a single shop in North London eleven years ago. Now there are more than 150 stores all over the country, generating profits of £6.3 million. What's the secret? Chris Hollins reports.
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When money is tight, we're bound to be attracted by promises like 'Amazing Value', 'Mega Deals', 'We will not be beaten on price' and 'Unbeatable Value'. These claims are certainly clear and definitive, but are they true?
Watchdog investigated some of the bold claims made by this chain. Firstly, we confirmed with a call to one of their stores that they stand by that in-store promise; we were told that 'we will not be beaten on price' means that you can't buy products purchased from 99p Stores, cheaper in anyone else's store.
Watchdog researchers carried out an investigation. Forty products chosen at random were bought from 99p Stores. The products were purchased - where possible - four times, from four different stores, over a three week period in March and April 2012.
We then used data supplied by the online shopping site MySupermarket in order to compare the prices at 99p Stores with those at the Big Four Supermarkets (ASDA, Morrison's, Tesco and Sainsbury's) on the same dates. During the course of our research we found that on at least one occasion, seven of the forty products were cheaper - when comparing gram with gram - at one of the leading Supermarkets.
We were told by Vince Mitchell, Professor of Consumer Marketing from the Cass Business School at City University that the claims made by 99p Stores include no caveats explaining what happens if you find the products cheaper elsewhere. Vince explains that this gives the impression to consumers that these claims are an absolute promise of value, but what we find is that with some of those price comparisons, you can find those goods cheaper elsewhere.
99p Stores also make their own price comparisons with the Big Four Supermarkets on labels in-store. However, we discovered that 27 of the 37 shelf-edge comparisons we checked were inaccurate. Sometimes the rival stores' prices were less than claimed, sometimes more - and in all 27 cases 99p stores were cheaper. But why the inaccuracies at all? Maybe because some of the price comparisons were made months ago even as far back as 2010.
Vince Mitchell tells us that the general image of this store is that it is good value and they won't be beaten on price - but if not all of their goods are the best value on the market, then consumers are not making the price comparisons that perhaps they should be.
After all that hard work at least our team could look forward to some cheap refreshment, thanks to a "wow" offer on Coca Cola: two bottles for just 99p. Except, when we got to the till, they charged us.... £1.80. Wow.
Hussein Lalani, co-founder of 99p Stores said:
99p Stores success over the last decade is down to the fact that we have consistently provided the best value and most competitive prices on the High Street.
On rare occasions the major supermarket chains will beat us on price on limited products by running special promotions. However, our customers know than 8 times out of 10 our stores provide the greatest value.
With regards to shelf edge labels we acknowledge that our systems and processes have not been as rigorous as they should have been and we are currently in the process of or updating these to ensure the comparisons we display are always as accurate as possible.
We offer more than 5000 products in over 186 stores across the UK and Ireland and the 2 million customers who shop with us every week do so because of the value we consistently offer all year round.
99p Stores: Do they really offer 'Unbeatable Value'?
In order to see this content you need to have both Javascript enabled and Flash installed. Visit BBC Webwise for full instructions. If you're reading via RSS, you'll need to visit the blog to access this content.
When money is tight, we're bound to be attracted by promises like 'Amazing Value', 'Mega Deals', 'We will not be beaten on price' and 'Unbeatable Value'. These claims are certainly clear and definitive, but are they true?
Watchdog investigated some of the bold claims made by this chain. Firstly, we confirmed with a call to one of their stores that they stand by that in-store promise; we were told that 'we will not be beaten on price' means that you can't buy products purchased from 99p Stores, cheaper in anyone else's store.
Watchdog researchers carried out an investigation. Forty products chosen at random were bought from 99p Stores. The products were purchased - where possible - four times, from four different stores, over a three week period in March and April 2012.
We then used data supplied by the online shopping site MySupermarket in order to compare the prices at 99p Stores with those at the Big Four Supermarkets (ASDA, Morrison's, Tesco and Sainsbury's) on the same dates. During the course of our research we found that on at least one occasion, seven of the forty products were cheaper - when comparing gram with gram - at one of the leading Supermarkets.
We were told by Vince Mitchell, Professor of Consumer Marketing from the Cass Business School at City University that the claims made by 99p Stores include no caveats explaining what happens if you find the products cheaper elsewhere. Vince explains that this gives the impression to consumers that these claims are an absolute promise of value, but what we find is that with some of those price comparisons, you can find those goods cheaper elsewhere.
99p Stores also make their own price comparisons with the Big Four Supermarkets on labels in-store. However, we discovered that 27 of the 37 shelf-edge comparisons we checked were inaccurate. Sometimes the rival stores' prices were less than claimed, sometimes more - and in all 27 cases 99p stores were cheaper. But why the inaccuracies at all? Maybe because some of the price comparisons were made months ago even as far back as 2010.
Vince Mitchell tells us that the general image of this store is that it is good value and they won't be beaten on price - but if not all of their goods are the best value on the market, then consumers are not making the price comparisons that perhaps they should be.
After all that hard work at least our team could look forward to some cheap refreshment, thanks to a "wow" offer on Coca Cola: two bottles for just 99p. Except, when we got to the till, they charged us.... £1.80. Wow.
COMPANY RESPONSE
Hussein Lalani, co-founder of 99p Stores said:
99p Stores success over the last decade is down to the fact that we have consistently provided the best value and most competitive prices on the High Street.
On rare occasions the major supermarket chains will beat us on price on limited products by running special promotions. However, our customers know than 8 times out of 10 our stores provide the greatest value.
With regards to shelf edge labels we acknowledge that our systems and processes have not been as rigorous as they should have been and we are currently in the process of or updating these to ensure the comparisons we display are always as accurate as possible.
We offer more than 5000 products in over 186 stores across the UK and Ireland and the 2 million customers who shop with us every week do so because of the value we consistently offer all year round.
99p Stores: Do they really offer 'Unbeatable Value'?