Poundland took market share from across the retail sector over Christmas, according to its chief executive Jim McCarthy, despite revealing slightly disappointing sales figures.
Shares in the budget chain, which floated on the stock exchange last year, fell 3.7% after he admitted a slower than hoped increase in new stores and a slowdown in growth at established outlets had held the chain back in the three months to 28 December.
A tie-up with Jane Asher on bakeware and baking ingredients helped sales rise 10.2%, excluding currency fluctuations. But analysts at Shore Capital estimated delays in opening a handful of stores had lowered the pace of growth by about 1.5 percentage points.
Analyst Clive Black said: “While this is an undoubted disappointment for management and investors alike, this is a short-term phenomenon that should bode well for full-year 2016 growth.” The broker added that underlying sales, which exclude the impact of new store openings, rose by between 1% and 2% over the quarter compared to as much as 4% in the previous quarter.
McCarthy said Poundland was set to open 19 stores in the next quarter so would meet its target for the year, and he was confident the chain would continue to see sales growth. “We would have liked sales to have been a little bit better, and it would have been if new store openings had been delivered,” McCarthy said.
Sales of make-up, baking equipment, novelty pet accessories and Christmas confectionery helped drive growth. McCarthy said the success of the tie-up with Asher had prompted it to team up with former Ground Force presenter Tommy Walsh for a range of DIY goods.
McCarthy admitted Poundland had endured a “slow day” on Black Friday, the late November promotional sales day imported from the US, as the majority of shoppers looked for their bargains online. He said: “I don’t think retailers benefited from Black Friday: the consumer did. Some retailers benefited [from higher sales] but I think we will see an impact on margins when they reveal their profit numbers.”
He insisted the day had not had a great influence on Poundland’s performance but said the chain would look at creative ways to participate in and generate similar sales events over the year.
This year is Poundland’s 25th anniversary and McCarthy said the chain would be making the most of that opportunity to get shoppers through its doors. He added that sales in Spain, where the group’s Dealz chain has opened five stores, were “going like the clappers,” and that the group was on track to have 10 stores open within the next 18 months.
