poundland store exterior (1)

Source: Poundland

One of Poundland’s flagship stores, in Stoke-on-Trent

More than a third of Poundland’s sales are at prices other than £1, up from 26% in 12 months.

The “milestone” in Poundland’s transition to multiple price points has been revealed in newly filed accounts at Companies House for the year to 26 September 2021.

Operating profit rose to £54.1m, compared with a £1.2m loss the year before.

It came as gross margin increased from 36.5% to 37.8%, reflecting the “increase in more multi-price products”, as well as more clothing and general merchandise, according to the strategic report.

Revenue of £1.5bn was up 4.6% on the previous year and up 0.1% on a two-year basis. Like for likes were “broadly stable” on a two-year basis, according to the accounts, covering Poundland and Dealz in the UK, Republic of Ireland and Isle of Man.

Poundland has been steadily moving away from its £1 single price point roots since about 2017. It now calls itself a ‘simple price’ retailer.

Opening its biggest store to date in February, in Nottingham, it said about half its range was now priced at over £1, with the most expensive item being a £150 egg chair.

However, the variety discounter recently backtracked amid the cost of living crisis. It said last week it was “resetting” stores to ensure 60% of lines cost £1 or less “to help support customers looking to save money”.

The accounts also reveal Poundland’s acquisition of 100% shareholding in Poundshop.com in February this year came at a purchase price of £1.

Separate accounts for Poundshop.com for the year to 30 April 2021 put the company’s net liabilities at £2.3m. The accounts do not include an income statement, in accordance with provisions for businesses subject to the small companies’ regime. 

The Poundshop.com website has become the platform for Poundland’s e-commerce operation. Poundland said Poundshop.com was “the UK’s largest online-only value retailer” when the deal was announced.

The acquisition of Poundshop.com from its founder Steve Smith – also the original founder of Poundland itself in 1990 – has given Poundland the additional fulfilment infrastructure needed to offer home delivery nationwide.

Poundland opened 40 stores in the accounting period but closed 42 under-performing or loss-making ones, preferring “quality over quantity”. At the end of the period it was trading from 823 stores in the UK, ROI and Isle of Man.