Dealz and Poundland owner plans to open at least 550 stores across Europe       

Pepco currently trades from 3,961 stores

Pepco, owner of European discount retailer brands Pepco, Dealz, and Poundland, has a long-term ambition to reach 20,000 stores.

Pepco, owner of European discount retailer brands Pepco, Poundland, and Dealz, said it would accelerate its store opening programme, with demand for its products remaining strong amid economic uncertainty.

The group, which listed on the Warsaw stock market last year, said it was aiming to open at least a net 550 stores in its 2022-2023 financial year, including taking the Pepco brand into Greece and Portugal.

It opened a net 516 stores in 2021-2022 and currently trades from 3,961.

"We are accelerating our strategy in order to capitalise on the opportunities available to us in these volatile market conditions," said chief executive Trevor Masters. 

The group has a long-term ambition to reach 20,000 stores.

"That's a very large number but it's one that we absolutely believe in that in the fullness of time we can deliver on," acting finance chief Mat Ankers told Reuters.

The acceleration means annual capital expenditure will rise to up to €400m, versus market expectations of about €225m.

For the year to September 30, Pepco forecast underlying core earnings on a constant currency basis of €735m to €750m, in line with expectations.

Group revenue rose 17.4% at constant currencies to €4.82bn, driven by the store openings.

Like-for-like sales rose 5.2% and were up 15.5% in September, providing a strong exit rate into the new financial year. 

Strong demand 

It said demand remains strong across its product ranges despite political and economic uncertainty.

Inflation across Europe remains at historic highs, but Pepco noted that in its core markets of Poland, Hungary, and Romania inflation in clothing and footwear was running at only around a third of the headline inflation rate.

Both clothing and food remain resilient categories in the Polish and wider Central and Eastern Europe retail sector, the company said, adding the outlook in Britain remained "challenging" amid pressures on consumers' disposable incomes.

"Consumers are seeking value now more than ever," said Mr Ankers.

"We are absorbing and mitigating costs to protect prices for consumers," he said, noting the firm had maintained prices this year and would do so next year, despite a hit to profit margins. 

• Reuters