A weak performance by Poundland has continued into a new financial year – and through Christmas – with like for like sales down 7.3% in its first quarter to 31 December.
The decline was largely driven by weak trading in clothing and general merchandise, which also dragged on Poundland in its previous financial year after it switched to sourcing ranges at group level.
However, quarter one 2025 also saw like for like sales fall in Poundland’s core fmcg category, according to a trading update from parent Pepco Group. The performance came “against a highly competitive environment in the UK”, the group said, as it put the brakes on Poundland estate expansion for the year.
Poundland revenues were down 9.3% to €563.
Its performance offset growth at its sister retailers Pepco and Dealz, leaving group like for like revenue down 1.1%.
Total group revenue was up 3.1% to €1.9bn.
Poundland’s estate also shrank in its latest quarter, from 836 stores 825, as it closed 13 and opened two.
The UK variety discounter’s “topline underperformance came alongside a contraction in gross margin, impacting Poundland’s profitability in the period versus the company’s expectations, as well as against the prior year”, the group said.
However, “we expect that the toughest comparative quarter for Poundland is now behind us”, it said. “The same quarter last year represented a period prior to the changes made within our clothing and GM ranges – and therefore, we expect the negative sales performance for Poundland to moderate as we move through the year.
“Poundland will also not open any net new stores during the year.”
Pepco Group CEO Stephan Borchert said: “Getting Poundland back on track is a key priority – we are undertaking a comprehensive assessment of the business and taking immediate measures on improving our cash performance and strengthening the customer proposition.”
A Pepco Group spokesperson added: “We are committed to getting Poundland back on track. As part of this, we are refocusing on its long-time strengths, such as recently increasing the number of core items at £1 or below from 1,500 to almost 2,400 in all UK stores.
“We can’t avoid that the UK retail environment has got tougher and we recognise that Poundland’s recent trading has been challenging. With annual sales of just over €2bn in FY24, Poundland remains a business that serves millions of customers each week – based around the idea of simple pricing and providing amazing value on a wide range of items in convenient locations.”
The news comes weeks after Poundland slashed hundreds of prices to £1 or less in its plan to get “back on track” following weak trading in its last financial year. Its like for like sales were down 3.6% in the year to 30 September, leading to a €775m write down for Poundland and a €662m net loss for Pepco Group.
Read more: Poundland’s theft clampdown was hinted at in its results. What else is on the way?
Poundland’s transition to sourcing clothing and GM at group level failed to replicate the breadth of previous ranges, according to Pepco Group.
However, in fmcg, which accounts for 67% of Poundland’s revenue, growth remained positive in its previous financial year, albeit offset by the weak performance of clothing and GM.
Poundland dropped everyday lines such as milk, eggs and bread to £1 in December. It then started 2025 by increasing the total number of products costing £1 or less from about 1,500 to 2,400 – nearly half its total range – including some clothing and GM lines.
This week stores were staging an ‘up to 70%-off’ sale in clothing, including “hundreds of items from £1”.
The retailer has been highlighting the change of tack with a new ‘Home of the Pound’ slogan on signs in stores and on social media.
No comments yet