Pepco, owner of Poundland, is skyrocketing as customers look for bargains in a tough economic context
- The retail industry said first-half sales had grown 22.8% to €2.39 billion
- Pepco Group is majority owned by the South African company Steinhoff International
Pepco Group posted strong sales growth as mounting economic pressures drove shoppers to look for bargains.
The Poundland owner saw sales grow 22.8 percent at constant exchange rates to €2.39 billion (£2.1 billion) for the six months ended March, following solid trading at its Pepco outlets.
Revenues from these stores increased by 36.9 percent thanks to the lack of Covid-related trade restrictions and the opening of several new stores, including the first in Greece.
Cheap deal: Poundland owner Pepco Group benefits from more Europeans looking for value-priced products amid a cost-of-living crisis mainly caused by the war in Ukraine
Trevor Masters, the company’s CEO, noted that the volume of net new store launches in Western Europe exceeded the opening in Central Europe.
But trade also benefited greatly from more Europeans looking for value-priced products amid a cost-of-living crisis.
The UK consumer price index currently stands at 10.1 percent, according to figures released by the Office for National Statistics on Wednesday, despite 11 consecutive key rate hikes by the Bank of England.
Meanwhile, the European Union has an inflation rate of 8.3 percent, with Hungary having the highest rate at 25.6 percent and other Eastern European countries such as Poland and Croatia also in double-digit territory.
Economic growth in both regions has also leveled off, giving discount retailers a significant opportunity to build a larger customer base.
The two fastest growing supermarket chains in the UK are Aldi and Lidl, both of which saw their UK sales increase by more than a quarter in the 12 weeks ending March 19.
Aldi recently overtook Morrisons to become the UK’s fourth largest grocer for the first time. Only Tesco, Sainsbury’s and Asda have a larger market share.
Masters said, “Our price leadership strategy gives us continued belief in our ability to win customers and market share, which we increased in our key markets last quarter.”
Pepco Group is majority owned by the South African holding company Steinhoff International, which floated the retail group in Warsaw two years ago, causing a major blow to the London Stock Exchange.
The company sells goods from 4,127 outlets in 19 countries, most of them in Eastern Europe under the Pepco brand, as well as more than 900 Poundland stores in the British Isles and around 200 Dealz outlets.
It plans to open at least 550 more stores in the current fiscal year, of which 166 have already opened in the first six months between October and March.