Discount chain Poundland has posted a rise in festive sales thanks to its status as an essential retailer and strong demand for expanded clothing and homewares ranges.
Owner Pepco Group said like-for-like sales rose 2.4% across Poundland stores in the UK and the Dealz chain abroad over the three months to the end of December – its key quarter, which accounts for around a third of annual sales.
It opted to temporarily close certain sites despite being allowed to remain open, and said sales among stores that traded throughout the quarter rose 4.3% across the two brands.
Pepco cheered a good response to its Pep&Co fashion brand, which has been rolled out to 300 stores in the UK, as well as more homewares lines and further moves to introduce new price points above and below £1.
But the wider group saw like-for-like sales fall 2.1%, dragged lower by a 6% drop at its international chain Pepco, which is not deemed an essential retailer and was hit by enforced closures due to coronavirus lockdowns across Europe.
The group said its 917 Poundland stores in the UK put in a resilient performance in its first quarter, despite many being based in high streets which have been decimated by Covid-19 restrictions.
It recently moved to temporarily close 44 of its UK stores due to the third lockdown in England.
Despite being essential shops, it said it had put the sites into “hibernation” after seeing an 80% plunge in shopper numbers across some retail centres and high streets due to the lockdown measures.
Andy Bond, chief executive of Pepco Group, said: “We anticipate that the consumer backdrop will remain challenging in the short-term.
“However, with our established growth strategy, centred on significant future store expansion within a structurally advantaged discount retail segment, and strong financial base, we believe that our future growth opportunity is greater than a year ago.”
Poundland has not so far repaid business rates relief, despite a raft of fellow essential retailers and supermarkets recently handing theirs back.
The group defended the decision, claiming it has not enjoyed the same booming trade seen by some essential retailers because it is based largely on the high street where footfall has tumbled.
In its update, it said it has revamped a further 38 Poundland shops in the Christmas quarter to add chilled and frozen food ranges.
In October, it bought frozen food retailer Fultons Foods as it looks to ramp up its food offering.
The update shows Pepco Group continued to open new stores in the quarter, up 15% to 3,128 shops overall, with plans to launch 300 Pepco outlets in the full financial year and up to 70 Dealz sites.
Poundland is part of troubled South African conglomerate Steinhoff, which has been battling to raise funds and cut debts since an accounting scandal drove it to the brink of collapse in 2017.
Steinhoff said on Monday it was dusting off plans for a possible stock market flotation of Pepco after the move was put on hold last year due to the pandemic.