Poundland expands Poundshop team as it prepares to launch UK-wide ecommerce service

Image courtesy of Poundland

Image courtesy of Poundland

Poundland is expanding the team at its Poundshop business as it prepares to offer a UK-wide ecommerce service.

Poundland bought online discounter Poundshop in March as a foundation for taking its own online business nationwide – and the business is expected to be rebranded as Poundland in the near future.

Since then it has wound down its own pilot online operation, which operated in a limited number of UK postcodes for 18 months, and it is now recruiting 35 back-office, warehouse and fulfilment staff to join Poundshop’s 65-strong team in Wednesbury. A range of Poundland goods – from its Twin Peaks chocolate bar and Quantum toilet roll to electronics in its Viido range – is now available to buy online on Poundshop.com, while Poundland continues to integrate Poundshop into its own operations.

The update comes as Poundland parent company Pepco this week reports rising sales and profits in the first half of its financial year, to March 31 2022. Revenues of €2.4bn were 18.9% ahead of the same time last year, with like-for-like sales, reported on a basis that strips out the effect of store – and business – opening and closures, 5.3% ahead of last time. Underlying pre-tax profits of €144m were 28.5% ahead.

Rising inflation

Pepco says that in the early weeks of the third quarter, sales are ahead of pre-Covid-19 levels, with average sales at a selected cohort of Pepco stores now 13.7% above pre-Covid levels, and Poundland average weekly sales up by 4.3%. However, inflation is a factor in rising sales, with existing supply chain disruption and rising costs worsened by the invasion of Ukraine and that’s likely to have an impact on profitability. The retail group says that while all of its markets are affected by inflation – and particularly Central and Eastern Europe the most, that’s been offset by wage inflation in some of those markets.

But in Western Europe – and especially the UK – the spike in inflation has resulted in lower spending by customers. “Specifically in the UK,” says this week’s statement, “the cost-of-living crisis has impacted customers’ disposable income as they scale back even on essential purchases in the short term. Our continue focus on reducing the costs of doing business means that we are able to offset some of our input inflation, allowing us to protect prices for all of our cost-conscious customers whilst also absorbing some of the input inflation ourselves, as evidenced by the decline in our gross margin.”

Incoming Pepco chief executive Trevor Masters says: “We are proud of the group’s performance in the first half of this year and the strategic progress made across the business. Despite a challenging macro environment, we accelerated our strategy, including our store opening programme, which remains the key driver of value creation for the business. As pandemic restrictions progressively eased, it was also encouraging to see the strong return of customers and the continuation of this into Q3 result in the group’s like-for-like sales rising above pre-Covid levels for the comparable period three years ago.”

Pepco, which trades in the UK as Poundland and in Europe as Dealz (in Ireland, Poland and Spain) and as Pepco, says that it opened a net 235 new stores in the first half, after closing 43 Fultons stores. In the full year it expects to open 450 new stores. So far it has refurbished 1,900 of its stores, including 265 Poundland shops.

The group is currently expanding into Germany, Spain and Italy in a way that it says will more than treble the size of its addressable market.

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