By Greg Wright

Published 7th Jun 2023, 07:53 GMT

Pepco Group, which also owns the Pepco and Dealz brands, reported a 23 per cent jump in revenues at constant currency to 2.8 billion euro (£2.4bn) in the six months to March 31, with turnover in the UK up 3 per cent at 896.3m euro (£771.5m) Like-for-like sales lifted 11.1 per cent across the group, up 15.8 per cent at Pepco and 4.9 per cent higher for Poundland.

But it said that an “uncertain trading backdrop” had continued into April and May with “signs of lower consumer confidence” and a clampdown on discretionary spending due to sky-high inflation, particularly in Central Europe.

“Evidence of this is being seen through lower frequency of visits and customers making different purchasing decisions,” Pepco said.

The owner of Poundland has reported higher half-year sales helped by store openings, but warned that tougher recent trading has continued as consumer spending comes under pressure.

Despite this, the group said it was keeping its full-year outlook unchanged as it is looking to speed up shop openings and given expectations for cost pressures to begin abating in the second half.

Results for the first half showed pre-tax profits down 9 per cent on a constant currency basis to 111m euro (£95.5m), weighed down by higher costs and investment in its store expansion programme after it opened 166 new stores.

The group added that it had not passed on all of the higher inflation it has been facing to customers. But it said it is expecting commodity and shipping costs to ease back as the year goes on, which is set to boost its profitability.

Trevor Masters, chief executive of Pepco Group, said: “As we highlighted previously, inflation remains at elevated levels in Central Europe, against which trading in Pepco stores has remained challenging during the third quarter to date.

“Despite this, we have continued to do the right thing for customers on a budget by maintaining our price leadership and growing our market share, while focusing on the cost of doing business in these inflationary times.

Poundland owner posts sales hike but cautions over tougher trading