Poundland’s like-for-like sales rose by 9 per cent in its latest quarter due to an improved FMCG performance, despite owner Pepco Group flagging a “challenging trading environment” in April and May.
Group sales were up 12.5 per cent to £1.17bn on a constant currency basis as Poundland overall revenue jumped 8.6 per cent in the quarter to June 30.
Chief executive Trevor Masters said “the macro-economic climate continues to be challenging, particularly in Central Europe, due to elevated levels of inflation” as like-for-like sales slipped 1.2 per cent overall in the quarter.
“We remain committed to supporting our customers in this challenging environment by maintaining our market leading pricing. Our focus remains on building a bigger, better, cheaper and simpler business and we are well positioned to deliver future success as inflationary pressures ease,” Masters added.
The group said its outlook for the full year remains unchanged, with EBITDA growth in the mid-teens on a constant currency basis.
During the period, the discount group launched 159 net new store openings as Masters said it “remains confident” on meeting its target of opening 550 net new stores this financial year.
In May, Poundland said it was continuing to seek out locations in the M25 for its new store format, following successful openings of the value retailer‘s local stores during the last six months in East Dulwich, Clapham, Swiss Cottage and Whitechapel.
Commenting on the figures, Mei Law, Retail Analyst at GlobalData, stated that the Group’s Poundland arm, including the Poundland and Dealz fascias, saw accelerated growth after slower recent quarters, with LFL revenue growth rising to 9.0 per cent as its “range revolution” saw a wider range of frozen food and fresh produce and beers, wines and spirits gracing the shelves of 570 out of 850 stores over the summer months.
“Poundland’s emerging status as a one-stop-shop will only strengthen as, come autumn, it will be sourcing its clothing and GM from Pepco in a move to harness the manpower of its larger sibling fascia. As Pepco Group’s infrastructure across its three fascias becomes increasingly centralised, it should consider streamlining the website, decreasing the minimum spend and shipping fees and offering a click-and-collect option which would further appeal to customers on grounds of convenience,” Law stated.