Pepco Group, the budget retailer operating across Europe, has announced strong revenue growth in the third quarter of the year. The company’s focus on offering bigger, better, simpler, and cheaper products has contributed to its success. In the April to June period, group sales reached €1.21 billion, bringing year-to-date revenues to €3.58 billion, a 17.4% increase when adjusted for currency fluctuations.

During the third quarter alone, revenue grew by 17.1%, with the Pepco retail brand leading the way with a 28.5% increase in sales. On a like-for-like basis, growth was 4.9%, with Pepco up 7.3% and Poundland up 2%. Comparing these figures to the pre-Covid period, average store sales at Pepco were up 9.2% in the quarter, while the Poundland Group saw a 5.6% increase in average store sales compared to three years ago.

One of the key drivers of value creation for Pepco has been its expansion efforts. The company has added 350 new stores to its portfolio this year, with a target of reaching 450 net new stores by fiscal 2022. During the third quarter, Pepco opened 115 new stores, including 40 in Western European markets. The company has also focused on store renewals, completing 82 during the quarter and 668 in total for the year. These renewals aim to enhance store layouts and environments to drive sales growth and improve customer perception.

Pepco conducted a successful trial in Spain during the third quarter, offering its full range of products in selected stores. This resulted in increased customer satisfaction, prompting the company to convert existing Dealz stores in Spain to Pepco stores and expand its FMCG offering in suitable locations.

Pricing is another crucial aspect for Pepco, and the company is committed to investing in its competitive price proposition. It also aims to reduce operational costs to support its pricing strategy. The company highlights that the discount market in Europe is now larger than it was during the 2007-08 financial crisis, indicating increased customer familiarity and preference for discount stores.

Trevor Masters, CEO of Pepco Group, expressed enthusiasm for the company’s expansion plans in Spain, emphasizing the opportunity to reach a wider customer base. He believes that leveraging the benefits of a broader offering will enhance efficiency and effectiveness. Masters remains confident in Pepco’s customer proposition, market positioning, and long-term value creation.

Useful links:
1. Pepco Group Official Website
2. Poundland Official Website