Discount stores

Pepco’s revenue rises as inflation-hit shoppers lean on discount stores

A sign is seen at a Poundland store in London, Britain November 10, 2015. REUTERS/Stefan Wermuth

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BENGALURU, July 14 (Reuters) – Poundland and Dealz owner Pepco Group (PCOP.WA) posted a 17.1% rise in third-quarter revenue on Thursday as buyers strapped for cash fueling demand in its growing discount chains.

Revenue reached €1.21 billion ($1.21 billion) at constant currency in the quarter ended June 30, with like-for-like sales up 4.9%.

The company opened 109 net new PEPCO-branded stores during the quarter, including 40 in the Western European markets of Austria, Italy, Spain and Germany.

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It said it was on track to launch 450 net new stores in fiscal 2022 as part of its strategy to sell products at low prices amid rising inflation, although many retailers focus more on online sales.

The European discount retailer said it was on track for another strong year absent any further significant deterioration in the macro trading environment.

The group’s shares, which have fallen 34% over the past 12 months, were trading down 2.6% in morning trading.

Rising costs, supply chain issues and conflict in Ukraine, which borders three of the company’s largest operating territories, are challenging the company’s outlook.

($1 = 0.9979 euros)

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Reporting by Eva Mathews and Chandini Monnappa in Bengaluru and Paul Sandle in London; Editing by Arun Koyyur and David Evans

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