Poundland sales hit £1bn for first time

POUNDLAND will seek to extend a deadline set by competition authorities over its acquisition of the rival 99p Stores chain as fourth quarter sales pushed annual sales above £1bn for the first time.

The firm, which is the biggest of a growing band of single-price discount retailers, has until Thursday to decide whether to sell a chunk of stores to assuage regulatory concerns, or agree to a full-scale investigation.

However, chief executive Jim McCarthy will ask for more time after the Competition and Markets Authority insisted on ‘acceptable undertakings,’ thought to include the sale of shops, if it is to acquire the 251 99p Stores.

Poundland (up 3p to 335p) has tapped into a drive for thrift sparked by the downturn which has seen fourth quarter sales increase 7.1pc.

This has taken full-year sales up to £1.1bn from £997.8m but the firm will reveal annual profit next month. While it managed to hit its target of opening 60 stores in the year, this was only by the skin of its teeth, with the last seven opening in the final week. The slower than planned expansion affected trading.

The firm is taking steps to speed up the roll- out of new stores to prevent a repeat of the problem. It currently has 547 stores and is running a trial in Spain.

The firm said: ‘We have continued to develop our trial in Spain and are pleased with the initial progress. At the end of the quarter we have five stores and have since opened our third store in Madrid.’

Greg Bromley, an analyst at research firm Conlumino, said: ‘Poundland is likely to find future growth more challenging.

‘The UK discount space has become more crowded, with single-price rivals Poundworld and Poundstretcher continuing to expand and discount general merchandisers such as Home Bargains and B&M doing the same.’