Goodbye to this famous retail chain: it is closing many stores in the United Kingdom

The retail sector isn't going through its best moment. The past few years have been especially challenging for brick-and-mortar stores that depend on a constant flow of customers to stay afloat. Many of these stores struggle every day to cover expenses and keep operating.

One of the most recognized chains experiencing this difficult situation is Poundland, a very popular discount retailer. Recently, the company announced the closure of about 68 stores in the United Kingdom and Ireland, putting around 1,000 jobs at risk. The company, which has about 792 stores and employs around 16,000 people, is facing a crisis that has led it to reduce its presence.

Challenges of traditional retail

Brick-and-mortar stores have had to face multiple challenges that have affected their profitability. The increase in online shopping and the decrease in foot traffic make keeping a store open a complicated task. In addition, the operating cost of these businesses is high, since they must cover expenses such as salaries, maintenance, utilities, and advertising.

During the pandemic, many businesses temporarily closed their doors, and several couldn't recover. According to the American Bankruptcy Institute, approximately 60% of retailers that closed during Covid never reopened. This shows how delicate the current outlook is for businesses that depend exclusively on in-person service.

For Poundland, which is known for offering cheap products at train and bus stations, the 6.5% drop in revenue during the first half of the year has been tough. This June, the company was sold for one pound sterling to Gordon Brothers, who also committed to investing 80 million pounds to try to stabilize it. This operation aims to give it a new boost and prevent more closures, according to The Street.

Strategies and uncertain future

Barry Williams, Poundland's CEO, described the closures as "regrettable," but emphasized that it's necessary to take these measures so the company can grow again. Although the chain remains strong and serves more than 20 million customers a year, its results haven't been up to par.

In addition to the stores, there are plans to close two distribution centers located in Darton and Bilston, in the United Kingdom. These moves are part of a strategy to reduce costs and adjust operations to the new market circumstances.

Poundland's future seems to depend on a deep restructuring that will allow it to compete in a sector increasingly dominated by online shopping and new forms of consumption. The possibility of new closures isn't ruled out, which creates uncertainty for employees and regular customers. The massive closure of Poundland locations exemplifies the difficult moment many traditional retail chains are experiencing.