Following today’s release of Pepco’s figures for the three months ending 30 June 2025; Matt Walton, senior retail analyst at GlobalData, a leading data and analytics company, offers his view: “Pepco continued to forge ahead in Q3 as sales reached €1,424m, an improvement of 2.7% on last year, which is impressive considering that the struggling, and now sold, Poundland fascia accounted for a quarter of this period’s revenue. Continuing operations were up 7.7% and more than counterbalanced Poundland’s 10.3% decline to achieve positive performance overall. The net opening of 45 stores for Pepco and Dealz boosted growth, though like-for-like sales (l-f-ls) were also positive at 2.6% as its recent focus on improving availability, price and ranges, paid off. Excluding the impact of removing FMCG from Pepco stores, to prioritise higher margin clothing and general merchandise products, l-f-l sales growth for Pepco and Dealz was 4.8%. The new Pepco Group remains on course to achieve its target of high single figure growth for revenues and underlying EBITDA, especially after it has jettisoned Poundland.
“Poundland’s recent performance has been especially weak even for a challenging value sector that has seen l-f-ls at B&M and Primark fall, as constrained shoppers have become more considered with their spending and focused on value for money. The failure of its Pepco GM and clothing range, due in part to a lack of promotion and its inability to take shoppers from Primark or Shein, has contributed to this as has its rapid expansion, following the collapse of Wilko. This led to its operating costs ratcheting up with its percentage of revenue reaching 32.2% in its H1 compared to 25.8% at B&M for its first half. Its predominantly town centre locations also struggled as more shoppers migrated to retail parks, which benefitted the grocers and Home Bargains.
“Gordon Brothers, the new owner of Poundland, has taken initial steps to steady the ship pledging £80m to turn the retailer around. Its restructuring plan aims to close 68 stores, pause rent payments and gain the right to terminate leases on its weaker stores, subject to creditors approval. It is also streamlining its grocery offer, exiting frozen foods to focus more on chilled essentials and its meal deal offer, and ceased its transactional website and Perks loyalty scheme. These steps to adjust its offer are prudent as it aims to get back to its previous core offer. It being likely to struggle to keep pace with others in food further justifies its decision to scale back. It also has to create a more compelling proposition for its shoppers that remain under significant financial pressure. This would include adding more trend-led products to its ranges in homewares and improving its store environment & visual merchandising.”
