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Discounter Poundland shares plans to extend its Pep&Co clothing concession to more than 150 new locations.

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The discounter reports a record Christmas performance, as well as securing funding independent of parent company Steinhoff, as investigations continue into accounting irregularities.

Best-ever Christmas performance

Poundland reported sales up 5.6% in the 12 weeks to Christmas Eve, including robust like-for-like sales up 6% in the three weeks before Christmas. These results are Poundland's best in its 27 years of trading, with managing director Barry Williams commenting "This Christmas, sales have even exceeded our high expectations", saying the business is entering the new year with "great confidence".

New source of funding enables Poundland to focus on future growth

As investigations into Steinhoff's accounts continue, Pepkor Europe has arranged a two year loan of £180m from a US investment firm, meaning Poundland, Dealz and Pep&Co are not dependent on capital from their parent company. Pepkor CEO Andy Bond said the funding "will enable us to reassure suppliers, implement our investment plans and secure the future of these successful businesses".

The latest update on Steinhoff's accounting situation revealed that discrepancies date back further than initially announced, with 2016 and 2015 results needing to be restated.

IGD's Christmas results tracker

How has Poundland performed against the market? Retail Analysis subscribers can keep track of the latest retailer results for Christmas

Steinhoff under investigation for accounting irregularities; ambitions to scale up store networks in Europe; new categories and services in development in the UK; Christmas initiative offers gifting inspiration.

Steinhoff CEO resigns, as accounting irregularities are under investigation

CEO of Steinhoff International Markus Jooste resigned with immediate effect, as the company has asked PwC to undertake an independent investigation of accounting irregularities.

Steinhoff operates 12,000 stores across the world, with a strong focus on discount retailing, and is the parent company of Poundland, Dealz and Pep&Co.

Scaling up store networks in Europe

The COO of Pepkor, parent company of Poundland, shares his international ambitions in an interview with Retail Week. Sean Cardinaal aims to expand the Dealz network in Spain, adding seven new stores this year. The company also plans to launch the Dealz banner in Eastern Europe, opening 20 stores by the end of 2018. Cardinaal sees potential for 500-1,000 stores across Europe, commenting “We have ambition to build a pan-European discount variety business that is of real significance.”

This follows recent news that Pep&Co clothing will be rolled out in Dealz stores internationally.

Trialling new categories and services in the UK

Poundland is trialling a move into the homeware category by introducing mattresses to its range for the first time, according to reports from Retail Week. The trial is active in twenty stores, and includes single mattresses for £79 and doubles for £99, both from Bensons for Beds (another Steinhoff-owned brand).

The retailer's pricing strategy continues to evolve. While reassuring customers it is committed to maintaining a core £1 proposition, this year Poundland introduced multiple price points, enabling it to offer a wider range of products and pack sizes. At the same time, Poundland's diversification into larger sized stores provides further opportunity to expand the range, including into physically bigger products. If the trial is successful, homeware may become a new destination category for Poundland in a similar way it has extended into clothing. This would bring the discounter into closer competition with B&M's "Home Store" format.

 Financial services are also in Poundland's proposition pipeline, both in terms of money transfer overseas, and offering credit to customers.

Interactive gift guide for Christmas shoppers

Ahead of Christmas, Poundland has launched an online gift finder. Its designed to help shoppers find the perfect present for their office Secret Santa, after research revealed that the UK spends £320m on the office tradition. Eighty percent of these gifts are re-gifted, thrown out or put at the back of a cupboard.

Users answer a short series of questions, and are presented with three products from Poundland's range that would suit their recipient. Try it out here

Retail Analysis subscribers can download IGD's Christmas forecasts and retail execution report

Iceland, Co-op and Poundland are the last to release their Christmas adverts.

Asda

Asda became the first of the major UK food retailers to launch a Christmas advertisement. In a set that resembles Willy Wonka’s chocolate factory, Asda has reproduced the magical feel of Christmas whilst upholding a clear focus on tradition and food.

The messaging should help build on Asda's recent work to strengthen its quality credentials while also retaining Asda's personality.

According to Asda’s Chief Customer Officer, Andy Murray, the inspiration for the advertisement came from seeing the reaction of customers when they took part in tasting sessions of Asda’s Christmas range. He explained “Earlier in the year we held sessions with our customers to get feedback on our Christmas range. As we talked to them about Christmas we could see how much joy and happiness planning their Christmas brought them – we knew we wanted to reflect that in our ad. When we saw their reactions to our food – the way it surprised them and made them smile – as well as the incredible pride and attention to detail our product developers had put into creating it, the inspiration for the Imaginarium was born.”

Asda 2017 Christmas advert (60 second) from Saatchi & Saatchi London on Vimeo.

Tesco

Tesco begins its 2017 ‘Everyone’s welcome’ Christmas campaign with the release of the first of its five Christmas adverts. The retailer celebrates food at the heart of the big day. The minute-long clip reveals different families on their missions to prepare the perfect Christmas turkey, placing emphasis on food and family in line with its Food Love Stores campaign.

Alessandra Bellini, Chief Customer Officer summarised the campaign, “This year, our campaign will celebrate the many ways we come together at Christmas, and how food sits at the heart of it all. We want our customers to know that however they choose to do Christmas, and no matter what they need, we can help - Everyone’s Welcome at Tesco.”

Tesco Christmas advert (60 seconds) from BBH London on YouTube

Marks & Spencer

Marks & Spencer has released its Christmas advertisement titled ‘Paddington and the Christmas Visitor’, ahead of the release of Paddington Bear 2 which is released in cinemas on the 10th November.

Set on Christmas Eve, the heart-warming advertisement shows Paddington unknowingly save Christmas.

Director of Brand and Marketing at M&S, Rob Weston, commented on the new release, “Paddington injects the sense of joy, love and neighbourly spirit that makes Christmas feel magical and our story reflects the inclusive, make the most of every moment approach that we take to our customer conversations.”

M&S has also produced a children’s storybook based on the tale. The book is available to buy for £3 both online and in store and all profits will be donated to the NSPCC.

M&S Christmas advert (95 seconds) from Grey London on YouTube

Lidl

The launch of Lidl’s ‘Every Lidl thing for Christmas’ campaign echoes the strategy used by Tesco, as retailers are creating an emotive connection with viewers. Across a series of three 20 second adverts which display a variety of festive foods, Lidl spotlights the ‘Mince Pie Maverick’, ‘Cheeseboard Champion’ and the ‘Pudding Perfectionist’ that appear in every family on Christmas day.

Lidl Christmas advert (20 seconds) from TWBA London on YouTube

Aldi

In Aldi’s 60 second Christmas advertisement viewers see the return of Kevin the Carrot as a romantic hero.

Narrated once again by Jim Broadbent, the sequel follows Kevin in his dangerous journey across a Christmas dinner table, aboard a moving train, all to save a beautiful lady carrot named Katie.

Aldi UK’s Marketing Director, Adam Zavalis said: “We launched Kevin last year with the line, heroes are grown, not born. And Kevin really did grow into our hero. Our customers took him to their hearts and enjoyed watching his escapades in the run up to Christmas.”

This year will also see the comeback of the sell-out Kevin and new Katie soft toys, due to launch on 23rd November. The toys will cost £2.99 and all profits raised will support Aldi’s charity partner, Teenage Cancer Trust.

Aldi Christmas advert (60 seconds) from McCann UK  on YouTube

Morrisons

This week Morrisons also released its 2017 series of Christmas advertisements which showcase key moments of the seasonal period, providing a festive family feel. The retailer also upholds a food focus, with displays of its free from range.

Scenes from the series are set both at home and in store, helping to build on its slogan ‘Morrisons Makes it’.

Morrisons Christmas advert (40 seconds) from Publicis London on YouTube

Sainsbury's

Sainsbury’s 2017 Christmas campaign launched with a 90 second advertisement titled ‘Every Bit of Christmas’ as an extension of the grocer’s long running ‘live well for less’ activity and in the style of this year’s Food Dancing campaign. The approach differs from previous years when Sainsbury’s has produced big budget feature ads, including ‘Mog’s Christmas Calamity’ and ‘The Greatest Gift’.

In the ad, the retailer places food at the heart of the campaign with clips showcasing its festive food range. The advertisement features staff and members of the British public celebrating the best of Christmas through a song written by British comedian Doc Brown, providing a festive family feel.

Laura Boothby, Head of Broadcast Communications at Sainsbury’s, said: “Living well has been at the heart of our advertising all year and there is no better time to celebrate that than at Christmas.”

Sainsbury’s Christmas advert (90 seconds) from Wieden+Kennedy London on YouTube

John Lewis

John Lewis has released its much-awaited Christmas campaign ‘Moz The Monster’ which features a small boy befriending an imaginary monster living under his bed. The 2 minute advertisement celebrates the imagination of children and the magical feel of Christmas.

The retailer has extended the campaign theme, enabling shoppers to enjoy Moz through other ways such as through ‘mozifying’ their faces through image filters on Facebook or purchasing Moz themed toys and mugs in store. Profits made from these sales will be donated to John Lewis’s chosen charity partner, Barnardo’s.

John Lewis Christmas advert (120 seconds) from adam&eveDDB on YouTube

Waitrose

Waitrose has launched its Christmas advertisement using the line ‘At Christmas, there’s nothing quite like Waitrose’. The 90 second clip celebrates community spirit at Christmas as a snowstorm unexpectedly forces locals to share Christmas lunch in a remote pub setting.

Customer Director for Waitrose, Martin George commented “As our ad depicts, eating together is a way to share not just food but friendship and community spirit.”

Inspired by the advert, Author Anne Fine has written a children’s book, ‘Let It Snow’. The book is now on sale in Waitrose stores and 50p from each book will be donated to The Trussell Trust, a charity which supports food banks.

Waitrose Christmas Advert (90 seconds) from adam&eveDDB on YouTube

Co-op

Co-op was one of the last retailers to launch its Christmas campaign, releasing the advertisement on December 1st. Much like its 2016’s campaign, food and community were placed at the heart of the 60 second clip. The advertisement featured Manchester based community groups singing Blur’s, ‘Tender’, upholding a fun, unrehearsed feel whilst showcasing Co-op’s festive food collection.

The track will be available to download, and all profits will be donated to Co-op Foundation.

Co-op Christmas Advert (60 seconds) from Forever Beta on YouTube

Iceland

Iceland’s Christmas campaign, titled ‘Tis the Reason’, includes a series of nine 20 second clips. These contain real life footage of children opening gifts on Christmas morning to reveal the retailer’s festive food collection.

Mel Matson, Iceland’s marketing director claimed the retailer intended to go against the grain this year, avoiding the typical tear-jerking campaign and aiming to make people feel jolly this Christmas.

Iceland’s Christmas Advert (20 seconds) from Karmarama on YouTube

Poundland

This year Poundland’s Christmas campaign again focuses on Christmas savings. The advertisements follow two Poundland fans asking members of the British public to guess the price of its festive products, who are then surprised at the £1 cost.

Poundland’s Marketing Controller Mark Pym commented, “This is how Poundland do Christmas; real customers talking about real products on the high street with real reactions”.

Poundland’s Christmas Advert (30 seconds) on YouTube

 

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