Poundland owner Pepco will accelerate its store rollout strategy as it looks to entice cash-strapped shoppers, after posting elevated profit.
The discount retailer said it was taking an increased focus on new stores in Western Europe and a refit programme in Central and Eastern Europe.
Pepco was upping its annual capex spend to between €350m and €400m over the next couple of years, the Warsaw-listed retailer said on Tuesday.
As a result of the discounter pressing accelerate on its strategy, the Warsaw-listed giant said it expected to deliver €1bn in core earnings in less than five years’ time.
The pan-European brand hopes to snap up market share as budget-conscious consumers look for the best deals on food and general merchandise.
Underlying profit before tax swelled 23.8 per cent year-on-year to €300m while like-for-like sales were up 5.2 per cent, results for the year to the end of September 2022 revealed.
As with other markets in Europe, the UK was “a challenging market,” due to inflation, interim group chief financial officer Mat Ankers, told CityA.M.
In the UK, Poundland stores have expanded a range of frozen and chilled items while store re-fits have focused on making changes for effiency of space and energy.
An expansion of food lines was “absolutely aligned to what customers want,” amid the cost of living crisis, Ankers said on Tuesday morning.
Pepco had reaped the rewards of the current crisis, according to Sarah Riding, retail partner at Gowling WLG, said.
“As this looks set to continue in the months ahead, the discount retailer’s plans for new stores across Europe is likely to attract new customers and support the company’s strategic growth going forward.
“By reinvesting into the business rather than paying out dividends, Pepco can enhance its international presence to become more resilient and cement its position as a leader in discount retailing.”