The parent firm of Poundland has said it is taking “immediate measures” to turn around the performance of the UK discount chain after a sharp drop in sales.
Poland-based Pepco Group said the UK business, which runs 825 stores, will increase the number of products it sells for £1 or less as part of efforts to get the chain “back on track”.
In recent years, Poundland has expanded its range of products being sold at price points above £1 in an effort to take on rival retailers such as B&M.
However, on Thursday, the retailer said: “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.”
Pepco said that recent trading at Poundland stores was challenging as the UK retail environment became tougher towards the end of 2024.
Poundland revenues slid by 9.3% for the three months to December 31, with like-for-like sales down 7.3%, as it witnessed weaker clothing sales.
The group also confirmed that it closed 13 Poundland stores over the quarter, with only two new store openings.
It stressed that Poundland will not increase its store numbers over the current financial year as it focuses on improving sales.
Meanwhile, the wider Pepco Group saw overall revenues grow 8.4%, supported by the opening of new Pepco and Dealz stores.
Stephan Borchert, chief executive officer of Pepco Group, said: “The group delivered a mixed performance in its first quarter, with a strong performance from both the Pepco and Dealz brands, partially offset by Poundland’s ongoing challenges.
“Poundland saw like-for-likes fall, largely driven by continued underperformance in clothing and general merchandise following the transition to Pepco-source product.
“Getting Poundland back on track is a key priority – we are undertaking a comprehensive assessment of the business and taking immediate measures on improving cash performance and strengthening the customer proposition.”
