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Poundland is the latest retailer to acquire former Poundworld sites.

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Poundland's nine month results reveal a decline in sales, but like-for-likes remain in growth. 

Sales decline reflects fewer stores trading 

Poundland reported total sales of €1,324m for the nine month period ending 30 June 2018, a decline of 5% (3% at constant exchange rates). This reflects 60 fewer stores trading compared to the previous period.

The retailer's like-for-like sales remain in growth, up +1.7% across the nine month period. However, this performance has diluted period-on-period, as at the half year point like-for-likes were up +2.4%. Parent company Steinhoff attributes this to the early timing of Easter this year.

Roll-out of Pep&CO continues

Clothing shop-in-shops continue to be a strategic focus for Poundland, and are now present in 274 stores. Take a look inside Poundland Luton to see how the retailer is evolving this concept: Retail Analysis subscribers click here.

Dealz in Poland: new store openings

The retailer continues to expand its network of stores in Poland, following market entry in February. In the third quarter two more stores opened, taking the total count to six. Retail Analysis subscribers can download our Dealz Poland store visit report: click here

Outlook

At a group level, Steinhoff has had a challenging nine months. Focus remains on maintaining stability within its operations. The investigation into financial irregularities is on track to be "substantially complete" by the end of this financial year. 

However, Steinhoff notes that Poundland is increasingly independent, which should provide significant opportunities to accelerate future progress.

 

We visited Poundland’s Luton store to explore the new dual-fascia with clothing brand Pep&Co.

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Variety discounter Poundland has launched a new private label skincare range, with all six products priced at £1.

New private label brand: #6

Poundland is growing its value private label offer with a new skincare range called #6. The premium-looking skincare range consists of six products, which form a complete skincare range. With these new products, Poundland aims to fit all budgets and enable shoppers to feel as if they are buying something luxurious.


Source: Poundland

Unlocking future growth

According to ShopperVista, a third of variety discount shoppers who buy skincare don't actually purchase the category in variety discount stores. The new skincare range creates a key opportunity for Poundland to capitalise on this since the main barriers to purchase are quality and choice, which the #6 range addresses. The products include a variety of credible ingredients including hyaluronic acid, shea butter, vitamins A & E, algae extract and more.


Source: Poundland

Skin care shoppers prefer well-known brands

ShopperVista's skincare category benchmark report highlights the importance of brands when it comes to purchasing skincare. Skincare shoppers need a reason to switch brands or purchase a new product. In the case of #6, no doubt the compelling £1 price point is enough of an incentive for shoppers to pick up a product and trial it. And while some shoppers may not want to switch their skincare brand, we can expect some new shoppers to the category to experiment with the range.

Want more information on the skincare category?

To read our recent report on the health and beauty mission in variety discounters, click here.

To read our report on how to identify challenges and opportunities within skin care, click here.

We visited Poundland's Luton store to see how the discounter is attracting more shoppers and driving sales with its new Pep&Co shop-in-shop.

90-bay shop-in-shop

Poundland Luton has an impressively large clothing offer, with Pep&Co taking up approximately one third of the sales space. A total of 90 bays, encapsulating the entire Pep&Co collection, is merchandised at the back of the store. Despite its location, the clothing offer cannot be missed with floor stickers in-store guiding shoppers and more noticeably a dual fascia outside of the store.

Bringing value clothing to over 300 stores

Pep&Co now trades from 300 Poundland stores; an impressive rate of roll-out between both retail teams. The popularity of the brand is driven by its fashion-led designs, family-focused range and value prices. The majority of the 1,200-SKU range is under £10, will the best-selling black jegging line at only £7. While 50% of the range is dedicated to womenswear, the proposition is also focused on meeting needs for men and kids, with each accounting for 15% and 35% of the range, respectively.

Shouting about price

Value pricing is a top priority as is evident around the store, however Poundland and Pep&Co's light and humoured approach on new in-store marketing and packaging shows how the retailer does not take itself too seriously. It wants to give the shopper a fun in-store experience, something which suppliers should keep in mind.

How does the offer fit with Poundland?

Pep&Co is a strong fit with Poundland's simple value model. With Poundland now offering prices outside of £1 (50p, £2 and £5), it is fitting that the retailer has added another dimension to its multi-price strategy with clothing; giving shoppers more reasons to visit stores where they can complete yet another mission or pick up an item on impulse. However, the variety discounter continues to make it clear in-store that £1 items are still at the heart of the business, and Pep&Co mirrors this with a small collection of value £1 lines. Overall, the two retailers sit harmoniously side-by-side, and given that Poundland is only taking on new sites that fit both a Poundland and credible Pep&Co offer, it seems that the two will continue to grow together.

Look out for the full Poundland Luton store visit report on Retail Analysis, coming soon...

Presentations

17/10/2018

An essential summary of trading priorities, latest developments, and other key commercial insights for Poundland.

17/09/2018
We combine our latest shopper insight with our retail expertise to explore the accelerators and inhibitors to growth in the UK discount channel.
04/09/2018
We visited Poundland’s Luton store to explore the new dual-fascia with clothing brand Pep&Co.
View all presentations

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