Sales at Poundland jumped 13% to £1bn in its last financial year, the latest sign that discount retailers are continuing to give more established chains a run for their money.
Total sales in the year to 30 March rose 13.3% to £997.8m Poundland opened 70 new stores across the UK, taking its total number to 528. It plans to open another 120 shops in the UK and Ireland over the next two years, and trial 10 stores in Spain.
‘Millions of customers are voting with their purses and wallets every week,’ said Poundland’s chief executive Jim McCarthy.
The retailer, which sells everything for £1, said it had delivered a ‘good underlying profit performance’ and expects profit to be in line with market consensus of £27m when it announces its full results on July 3.
Poundland made its debut on the London Stock Exchange in March this year. With an initial price of 300p, its shares are now trading at around 339p, a rise of 13%.
The economic downturn led to discount retailers outperforming the retail market in 2013 as consumers sought to make savings. An analysis of 5,900 shops by Deloitte last month found that discount outlets such as Poundland have been quickly filling up the free space left empty by recession-hit shops such as Woolworths and Jessops. Poundland alone has accounted for 25% of the total take up, followed by 99p Stores and B&M Bargains.
Earlier this week Tesco launched a counter-offensive against pound shop stores to stem the loss of customers to budget outlets. The UK’s biggest retailer has opened heavily-promoted 'pound shop' areas in more than 60 Tesco stores, and plans to increase this figure to nearly 300 over the next few weeks.
But now the economy is in recovery, will consumers still be as keen to bag a bargain?