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Poundland suffers shares dip following disappointing pre-Christmas sales

11 January 2016 - 11:37 by David Aiken

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One of the big retail stories of 2015 was that budget high street chain, Poundland, would be joining the e-commerce market in order to offer customers the opportunity to buy bargain products online. And now this move is looking more sensible than ever following the firm’s announcement of lower than anticipated bricks and mortar sales in the run-up to Christmas.

Shares in the company took a hit as a result, dropping by a tenth on Thursday last week, according to Reuters. This is being seen as an example of how the high street is continuing to struggle in the UK as a direct result of people choosing to seek out the affordability and convenience offered by the e-commerce experience instead.

Poundland’s rapid growth in recent years, including the takeover of a rival pound store chain in 2015, came at the expense of a less than ideal festive trading period. And chief exec, Jim McCarthy, was already aware of the problems that lay ahead back in November last year, stating that sluggish sales reflected an annual downturn in high street sales.

McCarthy subsequently said that while December did see a lift in sales, it was not in line with the typical increase which occurs as Christmas approaches. And there were other casualties of the rise of safe shopping online late last year, with Marks & Spencer posting particularly poor results.

In spite of the issues faced in recent weeks, Poundland is still a growing company which has managed to fit into an emerging niche on British high streets. But it will need to champion its online services, if it is to avoid hitting the point of stagnation earlier than anticipated, especially if it wants to secure its long term future.