Pepkor Europe, which operates the Poundland discount banner in the UK and Dealz in Europe, has posted sales of €1.7 billion in the first half of its financial year, an increase of 14.2% on the same period last year.
Store growth for the half-year was up 11.9%.
Growth was largely driven by the expansion of the group's PEPCO banner in Central Europe, which saw revenue growth of 32.2% in the period to €805 million, despite Polish Sunday trading restrictions.
Its Poundland Group business, which includes Dealz, posted revenue of €920 million in the period, which was 1.6% higher on the same period last year. Store growth at Poundland was up 0.5%.
Competitive Differentiation
'Poundland continues to outperform the wider UK high street driven primarily by the competitive differentiation from the introduction of clothing ‘shop-in-shops’, now present in approximately 300 stores, and measured product range extension to support a broader range of price points,' the group said.
At Poundland, Pepkor said that the group continues to 'rationalise its store portfolio, balancing the exit from stores in weaker catchments with carefully selected new store opportunities in stronger locations'.
It opened 20 new stores in the UK in the period, and undertook five relocations to larger stores.
The Dealz banner is set to reach 60 stores in mainland Europe by the end of the year, which represents a trebling of stores in a 12-month period, the group said. It has added a full apparel offer to its seven stores across Spain, while local brands have now been included in its Polish stores.
Trading Performance
"The strength of the Group’s trading performance in the first half year reflects our market leading positions within a core discount segment accessed by an increasing number of customers," commented Andy Bond, chief executive of Pepkor Europe. "With the benefit of scale leverage in PEPCO and targeted efficiency improvements within Poundland, profit growth in the half year will be stronger than the revenue growth reported today."
Bond added that the group's trading progress has been matched by its "strategic development", with the group's belief that "the Dealz format in mainland Europe can provide an exciting additional source of growth is increasing.
"Our planned investments in scaleable infrastructure across the Group to secure the growth opportunity available to us, may slow our rate of earnings growth in the second half year, but with a focused strategy in place and a strong financial base, the opportunity for long-term growth across Europe is clear.”
© 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.
