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Jackie: As other high street retailers struggle for survival, discount store Poundland is booming. So for this week's podcastsinenglish.com business podcast, we ask how can a company increase its profits by 50% when everything it sells costs just one pound.

Richard: Well, there are two main issues with Poundland they have an excellent marketing strategy and then they have a few tricks of the trade to maximise their profits.

Jackie: Right. If we start with marketing strategy, Richard... well it's a very popular store. How do they... how do they lure the customers in?

Richard: Well, in these times of austerity the biggest thing is they promote themselves as a discount shop. Everybody wants a bargain especially when times are tough. Everything is cheap, obviously, it's a pound.

Jackie: Right, okay. I think every shop has a poster in the window which says the same amazing prices since 1990.

Richard: Exactly. It gives people the impression that it's still cheap, as cheap as it was ages ago. In addition, although it's a discount shop it has a range of famous brands um... which also attracts people. And the other thing is, they shout very loudly about the bargains. There... they... a lot of their goods, they say '50% extra free', or 'buy one, get one free', those sorts of things which creates the customer perception of a bargain.

Jackie: Okay, Richard, so let's talk about the tricks of the trade then. Because they say the same amazing prices since 1990, when it started, but that's true, isn't it? They still sell everything for one pound.

Richard: Yes, but the difference is they've changed the packaging size. For instance in 2007 they sold 10 packets of crisps for one pound. Now they sell 5 packets of crisps for one pound so you're getting less for your pound.

Jackie: So you're still paying a pound but you're getting less for it.

Richard: Yes. In addition, they offer their goods in non-standard sizes. So you can buy a loaf of bread for a pound which you think is cheap but it's a 600 gram loaf not the standard 800 grams that you get in other shops.

Jackie: So it looks good value for money but actually Poundland are making a profit on that.

Richard: Exactly. It's not everything, but a lot of items they do this.

Jackie: Okay, we talked about the variety of... of brands and the famous brands, well that's true, isn't it?

Richard: Yes, but also the majority of things they sell are non-famous brands.

Jackie: So, who are the brands then?

Richard: Well, actually they're made by Poundland themselves. They're not branded Poundland, they've come up with a number of different so- called brands um... but they're made by Poundland themselves.

Jackie: Are you saying then that the brands don't exist?

Richard: Not outside Poundland. Um... no one would like to buy Poundland chocolates for instance.

Jackie: It sounds a little bit cheap, doesn't it?

Richard: It sounds very cheap... cheap indeed. But what they do buy in the shop is Delight chocolates which actually aren't found anywhere else and are made by Poundland although they don't mention it on the packaging. The marketers have a word for this, they are called 'Phantom' brands.

Jackie: The final thing Richard was the bargains. Are you saying that perhaps the bargains aren't as good as they suggest?

Richard: Yes. For instance, you can go into a normal supermarket and buy three bars of chocolate for a pound.

Jackie: Right

Richard: But what Poundland say [is] you can buy two bars of chocolate plus 50% extra for free, for one pound.

Jackie: So you're still buying three bars of chocolate for a pound.

Richard: Yes. But the... the perception from Poundland is you're getting this 50% extra for free.

Jackie: So take your time, double check, is it really a bargain?