A leading retail analyst has said that the Christmas period has 'not resulted in a strong start' to the year for single price retailer Poundland, despite the business posting like-for-like growth of 0.4% in the first quarter of its financial year.
Poundland's first quarter performance was revealed in the Q1 figures for parent firm Pepkor Europe, which were announced yesterday.
"On the face of it, the results are positive: revenues were up £2.8 million to £457.6 million, and Poundland also reported store growth of 0.2%, implying a modest 0.4% increase in like-for-like sales," commented Hannah Thomson, senior retail analyst at GlobalData.
"However, the collapse of British pound shop rival Poundworld last summer – which paved the way for Poundland to open stores in 13 new locations – makes these results appear slightly underwhelming. Pepkor points to weaker consumer confidence in the UK, but this should play to Poundland’s strengths, as it stands to benefit from consumers trading down.
"With l-f-l sales of fellow discounter B&M down -1.6% for the comparable period, consumers appear to have traded up or shopped less with the discounters, at least for the festive season."
Pepkor Performance
Pepkor said in its statement that Poundland 'continues to outperform the wider UK high street', driven by the introduction of clothing 'store in stores', which have now been rolled out to 300 outlets.
The group's Dealz business, now present in Ireland, Spain and Poland also 'continues to develop very positively', the group said, with plans to open 35 new stores in the two latter markets this year, taking its continental Europe portfolio to around 60 stores.
“A further quarter of strong revenue growth in each of the Group’s brands is a reflection of our clear growth strategy, centred currently on PEPCO, an unwavering focus on execution and our market leading positions within a core discount retail segment that’s increasingly attractive to a wide range of customers," said Andy Bond, chief executive of Pepkor Europe.
"Our positive early progress in Dealz provides further growth potential. With a clear strategy in place and a strong financial base we remain excited about our prospects for continued growth across Europe in the balance of the financial year and beyond.”
Overall, Pepkor Group posted total revenue growth of 14.6% in the first quarter, across 2,451 stores.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
