Poundland’s CEO Jim McCarthy has downplayed suggestions it had initiated a price war by dropping prices to 97p in areas where rivals – particularly 99p Stores – have recently opened new stores, saying he “can’t understand what all the fuss is about”.

McCarthy said the discount retailer had only launched the promotion at three of its 430 stores, in Dudley, Chelmsey Wood and East Ham. He refused to comment on whether the company would be rolling out the promotion to other stores, but said Poundland would continue to run the promotion at the three stores “as long as we think it’s sensible”.

McCarthy said the promotion was working well and confirmed there were no plans to change the company’s name to 97p Land.

“It’s a great compliment to and affirmation of our brand,” responded 99p Stores commercial director Hussein Lalani.

Lalani countered McCarthy’s claim that the promotion was a temporary offering, saying that Poundland first used the promotion at 95p in its Dudley store in December 2011 and had since changed it to 97p. “It’s permanent,” he added.