Poundland is trialling an increased grocery range in a third of its stores.

Europe's biggest single-price retailer has added 60 lines - mainly food - as part of the trial, which brings its number of grocery SKUs to about 450.

Grocery items including soft drinks, confectionery and snacks already account for 14% of space in Poundland's 4,000 sq ft stores and 29% of the company's sales.

The credit crunch and food price inflation has prompted increased demand for cheap groceries, and grocery suppliers are being more proactive in offering deals, said chief executive Jim McCarthy.

"Suppliers are recognising that this channel is growing and is credible," he said. "They are working with us to make pack sizes for our market."

If successful, the increased offer will extend to all the chain's 194 stores in the first three months of 2009. Following this, Poundland's grocery offer may be extended by another 20 lines at most because McCarthy wants to keep Poundland as "a general merchandiser".

"I don't want to be a supermarket - I do want to offer amazing value food and drink but I can't do a wide range of food and drink like specialists do and they can't offer the deals we can with just 4,000 sq ft per store," he added.

Poundland recently reported that operating profit rose 122% from £3.6m to £8m in the year to 31 March, while EBITDA rose 43% from £11m to £15.7m.

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