Discount retailer Pepco has reported a 2.3% fall in underlying sales in the Christmas quarter.
Despite the fall, the company said its gross margin had improved, with a positive trajectory expected to continue over the year.
Store Expansion
The news comes after Irish retailer Dealz, owned by the same company, revamped a number of its stores and converted to Pepco in 2023.
The Warsaw-listed owner of Pepco, Dealz, and Poundland brands said that group revenue was €1.9 billion in the three months to 31 December, its first fiscal quarter.
This reflected a rise of 11% on a constant currency basis.
This partly reflected the opening of 203 net new stores, including its tenth Irish Pepco in Sligo on 9 December.
The company expects the rate of store openings to moderate and plans to open 400 new stores in the financial year 2024.
Pepco also reported a strong performance in FMCG products, but that sales were offset by weak clothing sales.
Looking Ahead
Executive chair of Pepco Group, Andy Bond, reflected on the report positively and spoke of future plans.
He said, “Looking ahead, the Group has a market-leading customer proposition, strict focus on returns, and proven profitable store model that makes the leadership team confident in delivering future success across our core European markets.”
He separately noted the difficulties outside of their control, such as disruption to shipping through the Red Sea.
Pepco hope to absorb costs for the time being, but Bond said, “if this goes on for a long time, we will need to have a plan B."
Pepco, with more than 4,600 stores in 21 European countries, is a one-stop shop for clothing, food, health and beauty, homeware, toys, and key household needs.
