Battles in Cyberspace Pound Shop Wars

The question I get asked mostly in here, believe it or not, is,

"How much is this?"

How much is this?

That is the truth!

How much are these chamois?

There are shops which promise to leave customers quids in.

It must cost more to make than what they're selling it.

How they do it, I never know.

And they've put many of us under a spell.

That's a pound!

-I think it's great.

-We're always in pound shops.

I like a bargain.

But not everyone's crazy about the pound shop invasion.

-They're popping up everywhere.

-It's a con.

I think with the pound shops,

we're all going to need hard hats before long

just to be able to make a living.

For the boss of Poundworld,

it's a cut-price, cut-throat battle for the £1 crown.

We come to work every day, gumshield in, shin pads on, get on with it.

This week, Chris plans a new online store...

You can't make the same mistake twice in business,

so we'll make no mistakes this time.

..but sparks a cyber war.

A lot cheaper delivery and a lot cheaper next-day delivery.

Bring it on, we're ready.

In the shops, they've got a crime fight on their hands.

Holy smoke, shoplifter!

Quick, to the Batmobile. Come on, let's get him!

And Chris' pound shop rivals make a deal that could change

the face of the high street.

They think they can walk over everybody and I'm just the person

to try and say, "Well, you're not going to walk over us."

Across the country, the tills are ringing in pound shops.

Three for two, eh? You can't go wrong, can you, eh?

What an absolute bargain, eh?

But some shifty shoppers don't make it to the tills -

they're only out to steal.

It's a crime fight that all shops face

and it cost the retail industry over £600 million last year.

And in Liverpool, some looters have taken it to another level.

There was stock all over the floor, and as we looked,

there's this big hole in the wall.

On first inspection, I just thought it was plasterboard

that they'd come through, but when we went round to the other side

to have a look, it's breezeblocks, so they have come well equipped.

The thieves smashed through a concrete wall from an empty shop

next door, but weren't after bin bags or £1 bras.

They had their eyes on something a bit bigger.

As we came nearer, we've seen the big hole in the wall

which leads to the office, and the safe was missing.

It would have been about at least a tonne,

it'd have taken some carrying.

I think about five individuals were involved in physically

getting it removed from store.

It's not just the staff that are shocked. It's stunned shoppers, too.

Must have had some power tools to do that.

No conscience. No conscience whatsoever.

There's TK Maxx just a couple of doors down, do you know?

They could have gone there and probably got more.

The in-store CCTV captured the break-in.

What we've got now is the first of the intruders coming through.

You can obviously see a shadowy figure on his hands and knees.

There it is.

That's the safe coming out.

£3,000 was stolen,

and area manager Jason fears a member of staff could be involved.

There's no doubt that somebody, somewhere,

has got a good working knowledge of the store,

about where the safe's located.

Now, whether that's a professional gang who, you know,

have just done their homework,

or whether, you know, what we can't rule out is, obviously,

it could potentially be an inside job as well.

News soon reaches company boss Chris Edwards.

The last thing you'd think is somebody could actually

break in through next door's empty shop and pinch the safe.

It's a sad, sad world we live in, I'm afraid.

And at HQ, his mum Alice is already inspecting the evidence.

Be better if you were there and you could hit 'em

over the head with something.

Crime is giving Chris a hammering,

wiping millions off his annual profits.

£7 million from the size of our business is a big figure.

That's more than we earn.

We actually have more stealing than what we have profit in the company.

But shoplifters aren't his only concern.

Some offenders are much closer to home - the staff.

The majority are very good

and they've got the best interest of the business, but every so often

you get a bad apple, and they're the ones you've got to catch.

And to do that, he's employed a man in black -

his very own private investigator.

Somebody's got to make a stand

and now we feel as though we've got the ammunition to deal with them.

They all know he's in black, they all know they'll never see him,

but if he crops up, they're in trouble.

The private investigator's identity is on a need-to-know basis,

which gives him the edge when catching staff crooks.

If anyone is acting dishonestly, we will discover them.

I'm normally known in stores as the Traffic Warden or the Grim Reaper.

It's his job and he wants to keep his job, so he's got to catch 'em.

With his man in black ready to scythe down the losses,

Chris' attention turns to increasing his profits.

Six months ago, Chris got in on the fastest growing sector of retail -

the online market.

But he didn't do it alone.

He joined forces with his old nemesis,

the founder of Poundland,

Steve Smith.

It's quite ironic that, at one point, arch enemies,

and now we're in bed together, eh?

But not everything went to plan.

I've got no barcodes, I've got no descriptions.

We're working flat out in there, but it's really pushing it now.

And the website launch hit problems.

-It's not working, it's not working.

-I'm staying calm.

Six months on, with disappointing results, there's been a break-up.

It just wasn't working.

The website kept crashing.

The pound shop pals have grown apart.

He assured us his technology was right,

and we got that many hits. It just kept going down.

They wanted different things.

We was really hoping they would give us access to the stores,

so there was a bit of conflict there.

There were constant misunderstandings.

We thought we'd corrected it, and then relaunched again,

and the same thing happened again.

So they decided to go their separate ways.

With Poundworld, really,

they've got a lot on their plate without going online shopping,

so I think they should concentrate on what they're doing

and let us grow, really.

Steve might think that Chris has turned his back on online retail.

But he'd be wrong...

So we've batted around different ideas for the logo.

..because he's setting up his very own new website in-house,

with one massive difference.

We've looked at what you can actually achieve

with a single price, and while it's fantastic offers

and it does work in-store, we just thought it's an ideal opportunity

to marry the single price along with the multi-price items.

But selling things for more than a pound is not just about giving

the customer choice, it's about making a profit.

Ultimately, we need to get the basket spend up

to make this work as it needs to do.

Helen has got the task of setting up the website.

There's a heck of a lot to do, a very small team doing it,

and not much time to do it in.

So, yeah...

Pressure.

UK online retail sales are set to hit 57 billion by 2018,

so Chris and his in-house team have to crack the market

before they're left behind.

You can't make the same mistake twice in business,

so we'll make no mistakes this time.

It's fighting talk from Chris, and somewhere in Britain,

his man in black is squaring up to tackle staff crime.

But in Burnley, he already has his very own Dynamic Duo on the case.

Kapow! Boom!

HE LAUGHS

Holy smokes, shoplifter!

Quick, to the Batmobile! Come on, let's get him!

-You're crackers!

-Oh, no, I've dropped my utility belt!

Come on, let's get him!

-It's an ever-increasing battle.

-Mm.

-And it will never, ever dissolve.

-No, it won't.

It's something we've got to be on the ball with seven days a week.

Yeah.

We are the Caped Crusaders, but we're unmasked, like,

you know what I mean?

We're just protecting the company's assets at the end of the day.

We try and not make it obvious, obviously.

But, you know, at the end of the day, sometimes they cotton on.

Nothing gets past this eagle-eyed duo,

and they've got the results to prove it.

A cashier had bought a packet of these, and what she did was,

she took 'em out and put 'em into another packet,

so in effect, she were getting two packets for the price of one.

You know, why throw away your livelihood for the sake of a pound?

-Yeah.

-And that's exactly what she did.

It's two months since Chris broke off his online relationship

with Steve Smith, and his new website is taking shape.

It's really exciting to see it coming together,

and to be able to show that there's, you know, there's physical products

to see, to add to the basket, and, yeah, it looks really great.

But there's still plenty to do.

Kev has got to measure each of the thousands of products

they'll be selling on the website.

I've measured that and I've measured these.

They all have to be checked...

Instructions!

..and photographed.

Measured that. Measured these on this shelf.

Each item is given a detailed description.

-The key words, it's fluffy.

-Yeah, yeah.

-And it's got a zip.

And I measured this,

all this here...

With 6,000 products to list,

the size of the task is growing day-by-day

for the five members of the online team,

so they've had to make a drastic decision to delay the website launch.

We want to get it absolutely spot on,

and so if it means that we've got the right products

in the right departments, that everything is stable,

that the orders are going out as they should be,

then that's not a bad thing, to delay it to get it right.

More stuff, sorry. This is the last lot for today.

Back store, please.

But every day they're not online means missed sales

because there's already a pound shop website that's making money.

We're good to go!

Right, all live.

THEY CHEER AND CLAP

Hereforapound.com launched six months ago,

beating Chris to the prize of being the first pound shop online.

When we launched Here For A Pound, we didn't know...

It was new, you know, we were sort of breaking new ground,

so we didn't know if people wanted to shop online

for their pound items,

and we've got over 20,000 customers, and lots of repeat business.

The company's doing so well

that it's caught the eye of a multimillionaire.

He's a colossus of the business world...

..with a track record in moneymaking ventures.

And he wants to join forces with go-getter Donna.

Yeah, really exciting.

I'm about to meet somebody really interesting for our business.

He'll be a familiar face to many in pound shop circles,

especially Chris Edwards.

Cos it's none other than...

his ex!

-Hi, Steve!

-You OK?

-Yes.

The jilted partner has got back on his feet and moved on.

He's courting Chris' main competitor

and he's pulling out all the stops to impress her.

This is where it all started from.

The first shop opened December 13th 1990

in Burton-on-Trent.

And these were done before that shop opened, yeah?

Yeah, this was to convince a landlord to get the first shop,

and this shop, on the first day, took almost £13,000.

Not only could Donna have

the daddy of the pound shop revolution on board,

but there's someone else that wants to join in.

Hello, Ashley, Donna's here.

Steve's son, Ashley.

-Hi, Ash.

-Nice to meet you.

-Great to meet you, too.

Steve still owns Poundshop.com,

so his proposal is to merge with Donna's company using his brand name.

This is the new design that we've got going around.

Don't know if you guys... Don't know if you like it, Donna.

I love those colours. I love the name, Ash.

-It is the best name.

-Absolutely, it's the best name to go with.

It's going well

and 19-year-old Ashley has got a big idea to seal the deal.

Our dream is to have one million customers.

One million customers, that'd be fantastic money, really.

-That'd be amazing.

-Great.

I think, between you two guys, joined together,

I think it's great, really. So, er...

-Let's make this dream come true.

-Yeah, definitely.

While they prepare for an online onslaught, Poundworld's very own

private investigator is busy fighting staff crime.

At the minute, I'm focusing more on the internal theft side

and trying to get these members of staff who've basically had

a free meal ticket off the company for a while.

Dubbed by staff as the Grim Reaper,

he recently visited the High Wycombe store.

It was a fright for store manager Kieran and his team.

He kind of just pointed out every single thing that was wrong

and I took it very personally.

What he found wasn't pretty.

Within the warehouse, you had things like this.

Staff had just opened bottles of aftershave, pens...

In the toilets,

drinks bottles in the toilets with no proof of purchase off the staff.

That's hundreds of pounds worth of stock which wasn't accounted for.

He gave the staff a stay of execution,

and, today, he's back to make his final judgment.

That's the store over there, so, obviously, I'm going to take

a walk across there now and see what...see what's going on.

He keeps a low profile so he can spot suspicious behaviour

and see if staff are taking his warning seriously.

Some are prepared to risk their jobs to avoid paying a pound,

with chocolate, batteries and body spray

being the most commonly stolen items.

If he spots any open products, hidden stock, or staff not scanning

things through, it could be curtains for Kieran and his team.

It's time to make himself known to store manager Kieran.

What I want to do now is just have a quick look behind your till area.

He's on the lookout for loose cash or hidden stock.

So what's his verdict?

On the face of things, from the first visit,

it looks as if it's came on massive amounts.

It's a great result for Kieran and his staff,

who have done what they needed to do to win back the company's trust.

You have to take everything on board,

check, make sure the checks are done 100% correct.

If they're done, everything else follows.

While High Wycombe has nothing to hide,

others across the country have been caught red-handed.

This is one of the stores where we did suffer a huge loss.

So what they're doing here, the store's still open,

the two members of staff,

she's putting through the other member of staff's shopping.

But, then, all of a sudden, what she'll do is,

she'll press a function on the till.

Everything now which is going into the carrier bag...

she's not being charged for.

So it ended up being about a £40 sale, which she got for nothing.

The two staff involved were arrested and charged.

When we dismissed them two members of staff,

the trading figures went through the roof instantly,

because everything was going through the tills at that point.

As Chris' crime fight continues, a cyber war is brewing,

because word has got back to HQ that his old online partner, Steve Smith,

has gone into business with his rival, Donna.

He's up and running, he's thrown down the gauntlet,

and it's up to us to react accordingly.

So, don't know how long before Alan's going to get it finished,

but I hope to get a result.

And there's more bad news for Chris,

because the computer servers are playing up again.

Yeah, it's getting to a kind of critical stage now.

We've got a couple of weeks left before we launch.

Getting the servers sorted is taking the biggest amount of time

and if that's not sorted in the next couple of days,

it's going to be kind of, well,

that might make the launch happen a few days later,

so it's all very, you know, critical in these next few days.

With more technical difficulties to deal with,

they've got to make sure the website works,

so who better to put it through its paces than a complete novice?

You all right?

Alice has agreed to be their guinea pig.

-Show me what I do.

-OK, so you see that little...

-Yes.

..arrow there, if you move that, it's there.

-Whoa! Where's it gone?

-It's over there now.

-Oh!

-It's moved.

-Never mind.

I could be at the shop by the time I've done this.

-You just need a bit of practice, that's all.

-I know what I want.

Oh, now you've gone into Terms & Conditions.

If you click back up the top here...

It's not familiar ground for Chris' mum,

but she soon gets the hang of it.

And now you're in the storage department,

-so you can see all of our different...

-Oh, that's good.

With a bit more tuition, Helen, I might...

No problem, you might be our best customer.

I won't be, cos I'll be pressing all the wrong things!

With an 87-year-old won over,

there could be legs in the online market for Poundworld,

but whilst they're still waiting to launch,

their main rivals are planning to expand....

-Oh, wow.

-This is it.

-Look at this.

..by taking on a bigger warehouse.

-You can just see it, can't you?

-It's got so much potential, which we need.

-Could build our empire here.

-Definitely.

-Definitely.

They're expanding their range, too,

with new stock that Ashley hopes will wipe the competition clean.

Nine-pack of white...

Nine-pack of toilet roll for a pound,

which no other pound shop's doing at the moment.

We were the first to do it.

So far, going into partnership with Ashley and his dad

is paying off for Donna.

Sales have tripled, you know, lines have increased.

We've more than doubled the amount of products that are available

to customers, so there has been a big impact,

and it's growing month on month, you know, which is great news.

With their business growing,

they could already be too far ahead for Poundworld to catch up.

But at least Chris is winning his clamp-down on crime

because his man in black is getting results.

One particular store here,

which stands out like a sore thumb here, six-year prison sentence.

That is shocking, six years.

But the success has come at a cost,

with all stores given a big book of procedures to follow.

Feel the weight of that. Crazy.

Got a cart sheet, a safe-check sheet, back door logs,

staff searches, open and close log, stock declaration, cash declaration,

stock used for store, grazing sheet, last employee out form,

and that's just security alone.

It's crazy the amount of paperwork that's in here now.

But I understand, you know, why.

One rule asks store managers to document proof of staff purchases,

so Geoff has got his camera out.

Basically, the receipt is supposed to be signed and Sellotaped on.

It doesn't end there - Geoff's even got to frisk Ian!

-Empty your pockets!

-Oh, right, OK.

Random spot-checks are helping to put off potential pinching.

I've got a mobile phone.

Oh, that's from taking the dog out this morning, a roll of poo bags!

HE LAUGHS

You obviously understand why we do the random ones.

Oh, yeah, I've nothing to hide, mate.

You can random search me whenever you want, pal.

Oh, I forgot. Oh, yeah, and a winning scratchcard, £5.

I need to collect that afterwards.

It's just another company rule to add to the long list

that everyone has to follow, and it's pushed some staff too far.

"HMP Poundworld".

That's what she put on it. I couldn't believe it.

I mean, I know we're not really a Butlins holiday camp here, but look!

"I resign." That was it.

Tracy worked at Poundland in Burnley for two years, but last month,

she handed in her notice.

It was like prison.

The rules, the regulations... One minute late, you got told off.

No, I couldn't handle it no more.

I mean, I've been a manager, I've been a supervisor,

I've been a key holder, I've banked wages and money, and yet this kind

of pettiness does make me feel a bit bad, cos I'm a trusted person.

But being treated like this doesn't make me feel very trusted at all.

While some staff are unhappy,

Chris' hard line on crime is helping to increase his profit margin.

But something has happened in the world of pound shops

that could change everything.

The low-cost retailer Poundland has always had an eye for a bargain.

Now it's buying up its high street rival, the 99p chain.

With their main opponent planning high street domination,

Chris has got a big problem.

Yes, I am anxious to see how this is going to play out.

When the merger goes ahead,

Poundland will immediately have 800 stores, three times more than Chris.

When your major competitor takes over the other one,

so it's two against one, it could leave us with a difficult situation.

The Competition And Markets Authority has approved the takeover.

But Chris won't go down without a fight.

If they could possibly put us out of business,

I'm sure they would choose to do that.

They're powerful and they think they can walk over everybody

and, you know, I'm just the person to try and say,

"Well, you're not going to walk over us."

With the stakes raised, Chris could be set for his biggest battle yet.

Becky, these have just come in.

If you can quickly add those to the site.

At HQ, the online team is finally ready to launch.

Today's launch day.

Blood, sweat and tears have gone into this.

We're all on the edge, ready to press the button.

After the disaster last time,

they can't afford for anything to go wrong.

Five, four...

ALL: Three, two, one.

THEY CHEER AND CLAP

But this time, it's a smooth takeoff.

-Oh, my God. There's 40 people on the site already.

-Already?

-Yeah.

It's a promising start, with customers already taking a look.

But 150 miles away, their competitors have already got their knives out.

I think Poundworld Plus, erm...

Do you think it confuses the issue, that it's not just Pound...?

It'd be better if it was just Poundworld.

I like that we keep things simple, it's a pound. Everything is a pound.

They think they've found some holes in what Poundworld is offering.

-£20 minimum to spend.

-Mm.

-We're a lot cheaper delivery and a lot cheaper next-day delivery.

-Yeah.

But experienced Steve is not concerned.

For me, competition is really healthy.

I used to thrive on it, because...

And I used to not worry about what competition's doing.

-Worry about what you're doing.

-Exactly.

-So, Ash, bring it on.

-Yeah.

-We're ready.

The cyber war has kicked off, but at Poundworld's warehouse,

it's a slow start.

After an hour of going live, punters are still just browsing

and there's not been a single sale.

It's quite hard to predict, you know,

what the public are going to do,

so...fingers crossed, hopefully it really kicks off.

The future of online may be in the balance,

but with Poundworld's two high street rivals

on the brink of a major merger,

Chris has now come up with a way he can compete.

And it's brought him back to where it all began.

-Do you remember what's round the corner here?

-Yes. Our shop.

There.

-We had this for a long time, didn't we?

-We did.

-That's our old sign.

-Yeah, I know it is, yeah.

It brings back a lot of memories, this.

I remember borrowing £2,500 to put a new shop front in.

And I thought I'd borrowed the earth,

I thought I was going to be in debt for the rest of my life.

We've just realised how far we've come.

-It makes you think, doesn't it?

-Yeah.

You wonder where all the years go, though.

Chris and his family have built their retail empire over 45 years,

but now they've had an offer from investors

to buy a majority stake in the business.

It's a deal that values the company at £150 million.

This deal's come along just at the right time,

and if we're going to keep pace with all our competitors,

I think we just need to do this deal.

The investment will help Chris open more new shops.

Cos at the end of the day, don't forget,

we're responsible for 6,000 people's wages.

This just secures the future.

Chris will carry on running the company,

but for the first time in his life, he'll have partners to answer to.

Can you get sacked?

You know something, I've never really thought about it.

Hey, I might get the sack! Will I get redundancy money?

They'll say, "Can you get shot of your mother?

-"She's a bloody nuisance."

-They will, they will.

So I'll have to pay you off.

I'll tell you, do you know how much it would have cost for redundancy?

She's only done 63 years!

Yeah, 63 years in a family business, you'll get about four million quid!

Whatever the future holds,

having built a major high street chain from a single market stall

in Wakefield, Chris and Alice are unlikely to be

taking it easy any time soon.

-Look at that frozen range there, look at the mess.

-Where is it?

Who's in charge? This is a disgrace, this.