Poundland is aiming to reduce its operational carbon footprint by 50% by the end of this year, in a sustainability strategy detailed for the first time in its latest full-year accounts.
The goal is among a raft of sustainability targets the retailer has been pursuing since 2019, according to the accounts, also including making every customer shopping bag 100% recyclable by the end of this year.
“Customer shopping bags are a highly visible totem of waste and plastic use, and so ensuring they are both made from recycled content and are recyclable is a key step,” says the report.
The variety discounter had reduced its carbon footprint by 21% by 2022, and reached 80% recycled content for bags, according to progress updates.
A Poundland spokesman told The Grocer that, while sustainability had been “embedded in the business” for some years, Poundland had previously “consciously avoided chest beating” about it and instead “quietly got on with it”.
Former Poundland MD Barry Williams says in the report that the retailer wants to “lead the value retail sector on the transition to a low carbon economy”.
Progress to date has included becoming “the UK’s first value retailer with 100% doors on fridges”, according to the report, as well as purchasing 100% renewable energy for UK operations in 2023.
Among other targets, Poundland is also aiming for 100% of non-food customer packaging to be recyclable or reusable, and made with 35% less plastic, by the end of this year.
“As a leading value retailer, eliminating waste and being efficient is in our DNA,” said Williams. “However, we also feel a responsibility to our customers, colleagues, communities and the planet to drive environmental sustainability across our sector.”
Poundland revenue rose by 12% to £1.8bn in the year to 1 October 2023, while like-for-like sales increased by 5.5%.
However, operating profit declined from £55.6m to £25.2m, primarily driven by a £20.6m increase in depreciation as the company invested in capital improvements and infrastructure, plus an £8.3m increase in one-off costs due to a business-wide implementation of new ERP software.
The increased deprecation charge was partly store related, reflecting higher investment in new branches and refits, as well as investment in digital infrastructure, compared with a quieter period in the prior year with ongoing covid-related disruption.
Adjusted EBITDA – the company’s the key measure of trading activity – was down 1.3% to £171.7m.
Poundland opened 53 stores and closed 51 underperforming or loss-making ones in the period, in a fast-moving estate rotation programme placing “quality over quantity”. At the end of the period, the retailer was trading from 823 stores across the UK and Republic of Ireland.
The Grocer revealed last month how recent closures by Poundland had included nine former Wilko stores. The closures came within months of Poundland taking control of the leases to the stores from administrators for Wilko and reopening them under its own fascia. Poundland said all affected staff had been offered roles in nearby stores.
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