poundland truck

Consumers have more money in their pockets thanks to low fuel prices, unemployment rates and inflation, but Poundland CEO Jim McCarthy is confident they will continue to flock to his chain regardless.

Unemployment sank below 6% this week for the first time in more than six years, wages continue to rise in real terms at the fastest rate since 2008, and household confidence is at a post-crisis high.

But McCarthy shrugged off fears shoppers could abandon Poundland for more premium retailers as their disposable incomes grow, claiming recession-era shopping habits were now entrenched. “If you have a consumer who is full of confidence then they undertake more shopping missions,” McCarthy said. “Whilst counter-intuitive, the more confident the consumer, the more they spend with us.

“Even with more money, consumers are still looking for value. They are very bright, savvy shoppers and they understand they should look after their pennies and pounds. That kind of behaviour is very sticky.”

Poundland reported a record Christmas in its third-quarter trading update, but growth of 9.8% to £328.4m in the 13 weeks to 28 December represented a slowdown from the 15% registered in the first half. The lag was down to lost trading days from delayed new store openings and led to shares falling 5%.

McCarthy stressed the retailer was on track to open 60 net new stores in the UK and Ireland, adding to its estate of 573 shops, and had a “very strong pipeline” for the 2016 financial year.

McCarthy has been labelled as a 20/1 outsider by bookmakers to step into the breach at Morrisons but played down the possibility: “I’m very happy at Poundland and we have lots to do, so you can draw your conclusions from that.”