Poundland, the UK-based single price value retailer, has said it has seen good growth in food sales in the UK and that it may look to mainland Europe for further growth opportunities.
The retailer this morning (2 July) booked an increase in full-year profits as value-conscious shoppers continued to visit its stores.
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Speaking to just-food after the release of the group’s results, Tim McConnell, retail operations director for Poundland, said that the business has benefited from the tightening of the UK economy.
“I’d be lying if I said it hasn’t,” McConnell said, “but Poundland is successful in recession and out of recession. The reason is, we’re booming quite well but the actual high street in terms of numbers is down, so the number of people walking past the shops is down. However, of that share of people, we are winning more people over. So when the high street returns to normal, we’ll have more shoppers.”
Of its food sales, McConnell said the retailer has seen an increase in the purchase of “life essential” products, ie household, health & beauty and grocery.
“People are obviously cutting back on their discretionary spend. We are still benefiting in other areas but we have seen growth in those areas,” McConnell said, adding that any increase in the number of SKUs in this category would be dependant upon shelf space in stores and customer needs.
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By GlobalDataThe UK discount operator entered the Republic of Ireland in August last year with the launch of its Dealz stores. The retailer now operates 13 stores in the region.
“They’re performing really well,” McConnell said. “The Irish economy has had a particularly tough time and when we entered the Irish market the value proposition went down really well.”
McConnell said the group has plans to open several more stores by the end of the financial year with a total of 25 planned for the end of the 2012 calendar year.
Beyond that, McConnell admitted the group would consider expansion beyond its current markets.
“If you look at the UK, we have 410 stores. We had a piece of work done that identified around 1,000 sites in the UK so that gives you an idea of the growth potential in the UK. In terms of Dealz, once we have fully tested our model in Ireland, obviously we will look further afield and explore other opportunities. As it stands today we are just testing the model.”
