Q&A: Poundland chief executive Jim McCarthy

How do you feel Poundland performed last year?

I’m happy. It was another year of good numbers.

We should improve on them again this year. We have a strong store opening programme with a number of stores opening in the Republic of Ireland and adding more stores to the UK, even more importantly.

We will do more of the same this year . It is a successful formula. It’s transparent and different to high-to-low pricing. It is the same price every day, every week, every month and it helps people to budget. We will keep our nose to the grindstone.

How many stores will you be opening in the Republic of Ireland and when will you open in other countries outside the UK?

We are intending to have 25 Dealz stores [in the Republic of Ireland] by the end of the year. There is a strong pipeline there. We did an awful lot of planning and felt we had a good understanding of the Irish consumer.

We haven’t yet found our first country to open into on the continent. There is a huge amount of market reserach going on across the markets.

We’re keeping the launch flexible. We’re not quite sure what unanswered questions we have to face. It is when we completely understand that will inform the timing. Europe is more complex than the Republic of Ireland because of the different property and HR issues and, most importantly, consumers and their tastes and challenges.

How are you maintaining margins?

We have to take costs out where we can. The amount of packaging has reduced and we have improved other costs, such as how many miles the gallon we’re doing.

We’ve added more turnover and value to costs where we can.

We have to be careful but we have a very good, professional team and they try to secure the best deals from where they can.

In the past you’ve mentioned testing contactless payments and self-service checkouts. How developed are those ideas?

Contactless trials are still ongoing. That will come - I am absolutely sure the consumer will find it convenient - but we need to ensuere we select the right system and the right partner, so we are continuing to watch the market.

We look at self-service checkouts now and then but we’ve decided not to do anything more on it this year as there are so many other things that are more appropriate. It’s not quite right for us because of the way we have our queues, the average store size, the layout and the high capital cost. It doesn’t add up yet.

Since the recession hit, value retailers have boomed. Do you think that will continue as the economy recovers?

I think shoppers are very loyal.

It has been a rather long recession, and consumers have learned what value is and have easy access to it. You can measure it through iPhones and tablets and comparison sites, or the access to value retailers, such as Home Bargains and Wilkinson.

There are a lot of discounters out there and the big four supermarkets are becoming more competitive as they seek to protect market share.