Pictured above: Carwyn Beswick of Drivers Jonas Birmingham's Agency team

Discount retailers have increased by 60 per cent during the last two years according to new research by the Local Data Company backed by the British Property Federation (BPF).

Just under half of the 1,423 discount stores across Great Britain are in London and the South East and for every one discount retailer that closes, two have opened. Regions with the most discount shops include Greater London (357 outlets) and the South East (250).  The East and West Midlands came sixth and seventh in the regional breakdown with a total of 85 and 82 discount stores respectively.  Birmingham alone has a total of 21 discount stores.

Customer bases have also drastically changed.   Poundland, for example, has seen a 22 per cent increase in the numbers of shoppers from the richer AB group. Traditionally, their target market has driven by females in the C2, D and E socio-economic groups. 

The change has occurred because discount retailers have moved into more affluent areas including the first store to be opened in Stratford Upon Avon which is now located opposite Marks & Spencer on the town's high street.

Liz Peace, chief executive of the BPF, said: "Whatever opinions people may have about pound stores, they are growing in popularity and more importantly, generate jobs and footfall that benefits other retailers on the high street. This is good for landlords who would much rather have a discount retailer than an empty store, particularly as Gordon Brown is continuing to hurt businesses by making them pay full business rates on empty space.

"The rise has also been fuelled by the demise of Woolworths leaving more prime spots available. Some of our biggest members including British Land, Land Securities, Prupim, St Modwen and Westfield all have pound store tenants. 

"The increase in discount stores represents a marked change in the psychology of shoppers. Rather than shopping for a particular good or commodity, people are going out with a set sum of cash knowing that they will be able to get a specific number of items. And in practice they often end up buying more."

Carwyn Beswick of Drivers Jonas Birmingham's Agency team added:   "We have seen how market conditions have reduced rents and influenced lease terms across all sectors.  The discount retail sector has taken advantage of the credit crunch and in doing so begun changing the shape of the high street.  

"The flexible approach of these retailers extends not just to property but follows right through their business strategies.  Clever marketing combined with added pressure on household budgets has increased footfall but also introduced a new middle market of wealthier customers to discount stores.  These retailers have not just taken the market share of the likes of Woolworths but in many cases have taken over the premises too.  If inflation remains at low levels we could well see this trend continuing and an increased juxtaposition of premium and discount brands on the high street."