Poundland owner sees revenue hit from Red Sea shipping delays
Pepco said disruption in the Red Sea is ‘affecting the consistent and timely availability of stock in stores’.
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The parent company of Poundland suffered a slump in sales this year amid delays in stock reaching its stores due to disruption to cargo ships travelling through the Red Sea.
Pepco, which also runs discount brand Dealz, said like-for-like turnover fell 3.1% for the year ending September 22.
It said that delays to shipments due to cross the Red Sea – which have been redirected below the foot of Africa due to attacks on ships by Houthi rebels in the region – were partly to blame.
Pepco said the delays were “affecting the consistent and timely availability of stock in stores”.
It said it was taking “mitigating actions” including asking ships to set off earlier, changing shipping routes and sometimes using “faster carrier options” to tackle the problem for the coming year’s trading.
The company said Poundland has largely seen trends follow previous quarters, where it reported challenges linked to the launch of new clothing and general merchandise ranges from its Pepco business.
Pepco said the problems are “being addressed and initial benefits are expected to come” in the next financial year.
Andy Bond, chair of Pepco Group, said life-for-like revenues were down because of “ongoing supply chain disruption” but that the company expects to see record underlying earnings amid margin improvements.
Meanwhile, the business also opened 390 new stores over the year across all of its brands, which operate across 20 countries stretching from eastern Europe to Ireland.
Mr Bond added: “While there is much more to do, particularly around like-for-like sales progress, we remain committed to expanding our price leadership position, enhancing the core customer proposition and improving our supply chain capabilities.”