Major UK-based variety retailer Poundland has revealed new insight into recent trading in just published annual accounts.
Revenues returning to pre-lockdown levels
Though classed as an essential retailer during the lockdown, Poundland closed 85% of its stores where customer reduced customer traffic made them unprofitable in the short term. As stores have reopened progressively, revenue has trended back towards pre-lockdown levels. The reopenings have been enabled by a three stage strategic response to COVID-19. This focused initially on ensuring colleague and customer safety, before moving to the actions necessary to return to a more normal trading position. Now Poundland is beginning to explore the longer term opportunities, for example through a changed competitor set arising from the pandemic.
Unchanged longer term goals
Despite the unprecedented challenges of recent months, Poundland is sticking to its longer term goals over the next 12 months. These are:
- Continuing the rollout of its multi-price initiative in FMCG categories and in general merchandise
- Further rollout of its extended chilled and smaller format Pep&Co stores
- Reducing costs, particularly proporty costs, shrinkage and distribution costs
To boost profitability and fund price and range development, Poundland will also close loss-making stores and invest in technology to improve cost management.
Flat revenues in 2019
For the year to 30 September 2019, Poundland's sales were flat at £1.5bn. LFL sales were "stable" but up over two years when it benefited from the demise of rival Poundworld. EBITDA increased by 20% to £45.5m and operating profit increased to £26.7m from £22.5bn in the previous period. Poundland ended the year with 838 shops, down from 822 over the period.
For more insight, visit Poundland and Dealz: H1 and YTD like-for-like growth