Business booming for discount store Poundland

Discount retailer Poundland said today it is serving an additional half a million customers a week as it becomes one of the few retail chains to benefit from the consumer spending squeeze.

The company, which has 327 stores in the UK and Ireland, posted a 34% surge in profits as cash-strapped shoppers came to the chain looking for cheaper deals in a tough economic climate.

Poundland, which saw sales in the year to March 27 lift 26% to £642m, said it served on average 3.5 million customers a week, compared to three million a week the previous year.

The chain – which sells around 3,000 products, from Kodak batteries to reading glasses, all for £1 – posted underlying earnings of £31.7m in the period, compared to £23.7m the previous year.

Chief executive Jim McCarthy said: “It is clear that the challenging economic climate is set to continue for some time yet and that an increasing number of consumers will continue to seek exceptional value for money.

“Poundland is perfectly positioned to serve the needs of consumers who place value for money at the heart of their purchasing decisions.”

The group, which recently opened its first six stores in Ireland under the Dealz brand, said it aims to open 50 new stores in the year to March in a move which will create more than 2,000 jobs.

High inflation, muted wage growth and plummeting confidence has had a devastating impact on the high street, where stores are closing and well-known brands are falling into administration.

Discount retailers, including low-cost supermarkets such as Aldi and Lidl, have seen an upturn in business in recent months as hard-pressed consumers tighten their purse strings.

Poundland rival Poundworld recently pledged to create 1,800 jobs as it unveiled a new brand of stores designed to fill the gap left by the closure of Woolworths.

Poundworld, which has 120 stores across the UK, is growing its Discount UK brand, which sells products priced from 28p to £25, into a national chain by adding another 15 stores to its 13-strong portfolio.