Channel 4 did show a dispatches documentary on this..
http://www.channel4.com/programmes/d...es/4od#3429355 (you'll need to register with CH 4 to watch it).
They analysed exactly how the pound shops can charge such low prices and detailed all the methods used to save money.
They also pointed out that with careful shopping, you can often get more for your money.
I suppose the message is to not to limit yourself to looking in the obvious place for bargains
I find the same thing with Airlines.. A few years back, my friends got married in Turkey. Because of the distance and expense (specifically so we could save up or take advantage of early bird fares) involved they gave nearly six months notice.
I checked the prices for the same flight with all the cheap airlines, factoring in costs such as travel at the far end (airlines such as BA and Turkish Airlines fly into the centre of Istanbul, the cheaper airlines land at an airport that is apparently an hour and half away by car), taxes, food and drink on the plane (working on the assumption I would not be organised enough to take my own), in flight entertainment and taxes. I found that once I'd factored all that in, Turkish Airlines was actually slightly cheaper than Ryan Air and Easyjet.
Of course, it wouldn't have been had I not booked so early, but the point is that the budget companies are not always the cheapest.