Pepco Group, the owner of Poundland and Dealz, continues to face significant supply chain disruptions, impacting its financial performance.
- The group’s fourth-quarter like-for-like sales declined year on year by 3.1% due to ongoing disruptions.
- Total revenue for the 51 weeks ending September 22 rose by 10%, primarily driven by new store openings.
- Pepco remains optimistic, forecasting at least €900m in underlying EBITDA for the year, a 20% increase.
- Store expansion continues aggressively, with 64 new stores opened in the fourth quarter and net growth of 390 stores anticipated.
Pepco Group, known for its ownership of the retail brands Poundland and Dealz, is grappling with prolonged supply chain disruptions. These challenges have notably affected the group’s financial outcomes, as demonstrated by a 3.1% decrease in like-for-like sales during the fourth quarter compared to the previous year. This underlines the impact that supply chain fragilities can impose on retail operations, disrupting consistent and timely stock availability.
Despite these hurdles, Pepco’s total revenue for the 51 weeks leading up to September 22 has risen by 10%. This growth is mainly attributed to a robust new store opening strategy, which has been pivotal in cushioning the financial hit from supply chain issues. The opening of 64 new stores in the fourth quarter alone highlights the group’s commitment to expansion amidst adversity.
Shipping disruptions, particularly through the Suez Canal caused by militant attacks in the Red Sea, have been a significant factor in these supply chain challenges persisting throughout 2024. These disruptions have posed logistical challenges that extend beyond the control of individual retailers but remain a critical focus area for management.
Looking ahead, Pepco projects an underlying EBITDA of no less than €900 million for the current financial year, marking a promising 20% increase from the previous year. This projection reflects Pepco’s confidence in its strategic initiatives to overcome existing challenges and enhance profitability.
The Group’s executive chair, Andy Bond, expressed satisfaction with the progress, particularly in restoring profitability in the core markets of Central and Eastern Europe. He noted, ‘While there is much more to do, particularly around like-for-like sales progress, we remain committed to expanding our price leadership position, enhancing the core customer proposition, and improving our supply chain capabilities.’ This statement conveys a forward-thinking approach to tackling both current and future challenges.
Pepco Group remains resolute in overcoming supply chain disruptions and continues to forge ahead with its strategic expansion and profitability initiatives.
