Poundland owner Pepco Group has said UK shoppers are “scaling back even on essential purchases” amid the cost-of-living crunch.
The group recorded a 7.3% uplift in underlying EBITDA to €347m (£318m) in the first half to March 31, 2022, driven by a 19% surge in revenue to €2.4bn (£2bn).
The retail group recorded a 3.3% uplift in like-for-like sales during the period for the Poundland division of its operations.
This retail division, which operates under the Dealz fascia in the rest of Europe, said sales in the eight weeks from March to May 2022 were 4.3% ahead of pre-Covid levels amid a flight to value among shoppers.
The retailer said: “Specifically in the UK, the cost-of-living crisis has impacted customers’ disposable income as they scale back even on essential purchases in the short term.
“Our continued 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 while also absorbing some of the input inflation.”
As a result of this, alongside increased freight costs, the retail group’s gross margin declined by 137bps during the period.
Poundland opened net 33 new stores in its interim period, primarily in Poland, 26 of which were Dealz stores.
Like-for-like sales across the group’s primary Pepco division rose 7.2% overall and were up 13.7% on pre-Covid levels in the eight weeks from March to May.
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