Poundland suffers sales plunge in Christmas quarter

Poundland suffered a like-for-like sales decline of 7.3% in the quarter to December 31, 2004. Pepco said that the decline was ”largely driven by continued weak clothing and general merchandise performance, alongside previously flagged challenging market conditions”.

The sales fall ”came alongside a contraction in gross margin, impacting Poundland’s profitability in the period versus the company’s expectations, as well as against the prior year”.

Although conditions remain tough, Pepco was cautiously optimistic about Poundland’s outlook.

It said: “We expect that the toughest comparative quarter for Poundland is now behind us – the same quarter last year represented a period prior to the changes made within our clothing and general merchandise ranges – and therefore, we expect the negative sales performance for Poundland to moderate as we move through the year. Poundland will also not open any net new stores during the year.  

A Pepco spokesperson added: ”We are continuing a comprehensive assessment of Poundland to recover trading and get the business back to its core strengths, including undertaking a thorough assessment of all costs across the business, as well as evaluating its overall competitive positioning.

“We are committed to getting Poundland back on track. As part of this, we are refocusing on its long-time strengths, such as recently increasing the number of core items at £1 or below from 1,500 to almost 2,400 in all UK stores.

”We can’t avoid that the UK retail environment has got tougher and we recognise that Poundland’s recent trading has been challenging. With annual sales of just over €2bn in FY24, Poundland remains a business that serves millions of customers each week – based around the idea of simple pricing and providing amazing value on a wide range of items in convenient locations.”

At group level, Pepco achieved revenue of €1.9 billion in the quarter, ahead 3% at constant currency.