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...

Like-for-like sales grew 2.4% in the six months to 31 March 2018.

Sales decline reflects fewer trading stores

First half results highlights included positive like-for-like sales growth, and maintaining margin rates, despite a tough trading period.

However, Poundland sales declined -6% to EUR 900m (down EUR 54m from the previous year), reflecting approximately 60 store closures at the end of the period last year.

Poundland's international store network now comprises of 871 stores, including two new Dealz stores in Poland, four new Dealz stores in the Republic of Ireland, and five new Poundland stores in the UK. 

PEP&CO performing strongly

In the period, 99 new PEP&CO store-in-store concepts were added, taking the total to 210. A further 70 will be rolled out in the second half of the year. PEP&CO delivered very strong results, with like-for-like sales growing 9.4%.

Want to know more?

Retail Analysis subscribers can read our Dealz Poland store visit here

Poundland reported like-for-like sales up 5% in the Christmas quarter, whilst decline in total sales reflects net store closures. In Europe, the first Dealz stores open in Poland.

Healthy like-for-like performance from Poundland

In the three months ending 31st December 2017, sales in Steinhoff's European general merchandise division saw double digit growth of 10% year on year, reaching EUR 867. Poundland and Dealz stores in the UK, Ireland, Spain and France account for 59% of this, with Pepco stores in Eastern Europe accounting for the remaining 41%.

Poundland's sales performance reflects a 10% reduction in the number of stores trading. Sales decreased 5% (or 3% in constant currency) to EUR 513m. However, a healthy increase in like-for-like sales of 5% was supported by a record Christmas period.

The small chain of Dealz stores in Spain performed particularly strongly, growing like-for-like sales by 10%.

In the year ahead, Poundland will continue to pursue its multi-price strategy, and the roll-out out shop-in-shop Pep&Co clothing.

New market entry for Dealz

Building on the success of its Pepco business in Eastern Europe, the retailer has recently launched the variety discount Dealz banner in Poland. The first store opened in Poznan in February, with plans to reach 20 stores by the end of this year, and 200 stores in the next three years.

Retail Analysis subscribers will be able to download IGD's Dealz Poland store visit soon...

Management and finance solutions as challenging times continue for Steinhoff

Investigations into the accounting irregularities at parent company Steinhoff continue.

Following a series of senior level resignations in December, Steinhoff has appointed a new acting CEO Danie van der Merwe, deputy CEO Alexandre Nodale, chief financial officer Louis du Preez, and commercial director Philip Dieperink. Richard Heis has also joined in the new role of chief restructuring officer. There are further changes at board level, and new governance and ethics committee has been established.

Steinhoff has held meetings with lenders and credit insurers across its markets to address the challenge of accessing working capital. It reports that the majority of the group's international operating subsidiaries have now arranged their own working capital facilities. However, there is still work to do here, and Steinhoff is entering the next phase of broader lender engagement.