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Poundland has shown improving results, with revenue rising 1.6% in H1 for the half year ending 31 March 2019.

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Poundland seeks to widen its appeal by expanding its product offering. The includes growing both its fresh and beauty range, and the launch of a new meal deal.

New fresh meal deal

Poundland will be increasing its fresh offering, adding 22 new products to its range, according to The Grocer. These will be a mix of branded and private label products, including fresh fruit and a range of sandwiches.

Sandwiches will be produced by Greencore on a daily basis and cost £1 each. This comes with the launch of a new meal deal. Shoppers can combine a sandwich, packet of crisps, bar of chocolate and drink for £2 in the deal. This is a slightly higher price than the cheapest meal deal on the market from B&M at £1.75. The offer will be rolled out across all stores, with Poundland suggesting it may add more products into the deal in the future.

By expanding the range and growing fresh Poundland has the potential to drive footfall and widen its appeal to new shoppers on a food-to-go mission.

Championing health and beauty

Poundland is currently running a health and beauty event with many branded products being offered at £1. This is being promoted across its social media channels drawing shoppers' attention to its continuously developing health and beauty range.

Recent additions include anti-ageing collagen products in its #6 private label skin care range. It also recently launched a new collection of beauty products with reality TV star from TOWIE, Jess Wright. This includes fake tan, nails and perfume for £1 each.

Poundland now sells a large range of makeup and beauty accessories that differentiate it from other discounters. This has generated a lot of positive press for the retailer and much attention on social media. We expect the range to continue to develop in the future.

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Poundland's parent company Pepkor has released its latest financial results for Q1.

Poundland: positive results driven by clothing

  • Total revenue: €516m (GB£433m) an increase of 0.6%
  • Stores: 882 an increase of 0.2%

Despite the broadly flat performance Pepkor was happy with the results, given the weak UK consumer backdrop.

The results built on the positive Q4 results of 2018. Pepkor has said this is being primarily driven by the successful introduction of clothing 'shop-in-shops', which are now in over 300 stores. By extending the product range and supporting a broader range of price points stores are performing well and delivering strong returns on invested capital.

Poundland opened 13 new stores in 2018 and relocate three stores to larger locations. Poundland is expected to continue to expand in 2019, but Pepkor have not said by how many stores. 

Developing its proposition in a competitive channel

Despite the closure of Poundworld in July 2018 we are seeing increasing competition for all the variety discounters. This includes the launch of One Below, the new chain created by Poundworld founder Chris Edwards. But also, format innovation in existing retailers as they continue to develop concepts to engage value seeking shoppers.

Poundland recently announced plans that it was creating a new transformational team to develop its store proposition, in The Grocer. This will be led by Mat Ankers. Ian Keyworth will report into him as head of operational change. Poundland's retail director, Austin Cooke, has said possible developments are making the stores closer to department stores. 

Dealz: continued expansion

Dealz stores continue to perform well, with Spain said to be delivering positive like-for-like performance. Pepkor is looking to build on this and expand the estate further. This includes entering new market Bulgaria with 10 stores, and opening a further 14 stores in Poland. This will take the total Dealz stores to 60.

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Pepkor Europe-owned Dealz, part of the Poundland family, plans to open 20 stores in Spain over the next three years. Dealz currently has 10 stores in Spain, after opening two in Q4 2018. InfoRetail reports the news as part of an interview with the company.

Targeting shopping centres and high streets

Dealz will continue to open its new stores in shopping centres and high streets and start opening in retail park locations. Geographically, the openings will be split between Madrid and Valencia. The stores will have sales areas of between 750 to 1000 sqm. Around 5,500 items will be sold, 2,500 of which cover its clothing range.

Dealz has upgraded the clothing section in some of its existing stores and has seen higher than expected sales growth. In a Madrid store the average price of clothing items is €1.50. If the expanded clothing range is successful in the initial tests, it will be rolled-out more widely.

Sales growth driving expansion

Dealz performed well in Spain in FY 2018 with positive like-for-like growth. In Q4 2018 Dealz saw 10% sales growth, two percent more than Q4 2017. Read Pepkor Europe’s full 2018 results here.

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