The owner of Poundland has confirmed it will not go back to selling items for a pound despite its pledge to ‘protect’ shoppers during the cost of living crisis.
Andy Bond, the executive chairman of Pepco, a Polish company which owns the discount retailer, said it was ‘too early’ to say whether it would start to reduce prices to ease the burden on cash strapped families.
The former Asda chief executive told The Times there are still ‘tailwinds’, such as the increase in transport costs due to attacks on shipping in the Red Sea, that are preventing the company from slashing fees.
He said: ‘While there is easing pressure in some parts of the business, I’m not sure that prices will necessarily go down.’
Poundland first ditched its ‘everything’s £1’ slogan in 2019 and then priced all products between 50p and £5.
The business was listed on the Warsaw stock market in 2021, with bosses claiming the move would allow them to offset rising costs and ‘protect prices for our cost-conscious customers’.
The owner of Poundland has confirmed it will not go back to selling items for a pound despite its pledge to ‘protect’ shoppers. Pictured: A Poundland store in Derby, England
Andy Bond, who is the executive chairman of Pepco, a Polish company which owns the discount retailer, said it was ‘too early’ to say whether it would start to reduce prices
Bond claimed that over the past two or three years, average prices have only increased by a ‘single digit’ and have ‘not gone up more than 10 per cent cumulatively’.
However he did say ‘some individual items that may have done across the basket’.
The 59-year-old recognised shoppers were finding it ‘particularly tough to make ends meet’ and pledged that prices would not go up in the next year.
He said: ‘Now that we’re into a period where costs have gone down somewhat, the first thing we’re happy to do is to recover our margins, but we can do that without putting prices up.
‘I don’t see any degree of inflation in our business over the next 12 months.’
The Pepco boss added the company would aim to keep prices ‘as low as possible’, arguing the fact it lost money during the Covid pandemic ‘demonstrates’ that.
He added the company is ‘optimistic for the second half of the year, despite negative like-for-likes’.
Bond, who served as Asda’s CEO from 2005 until 2010, returned as Pepco chief executive in November 2022 following a recovery from illness.
Bond claimed that over the past two or three years, average prices on Poundland have only increased by a ‘single digit’. Pictured: A Poundland store in Slough, Berkshire
In a trading update last year, Pepco Group, which owns the Pepco and Dealz brands in Europe as well as Poundland in the UK, revealed profits fell 35.8 per cent to £126million for the 12 months to the end of September.
Bond said at the time the result was ‘disappointing’ as the cost of opening another 668 stores across the group, as well as inflation and interest rate pressures, offset a 17.7 per cent rise in sales to a record £4.8billion.
Pepco said trading since the start of the financial year has been ‘mixed’ with group sales down 3.1 per cent in the eight weeks to November 26. The firm also said that it has opened 64 former Wilko stores under the Poundland brand.
It struck a deal in September to buy up to 71 Wilko stores from administrator PwC after the collapse of the High Street chain.
Poundland has also opened another 23 stores in addition to those it purchased from Wilko’s administrators and is planning more openings in 2024.
Its estate has grown to more than 800 shops in the UK amid an ambitious expansion.