Poundland owner Pepco (PCO.WA) has announced plans to open 550 stores in the current financial year due to strong demand.

The group, which also owns the Dealz chain in Ireland and the bloc, said the acceleration plans were driven by growth in Central and Eastern Europe and demand from new and existing customers whose budgets were under pressure.

The company expects sales growth to continue in the mid to high double-digit range due to higher like-for-like sales and the investment plan for the stores, it said.

Compared to the previous year, the discounter had already opened 516 net new stores, not including the closure of 59 Fultons Foods stores.

Overall, Pepco’s revenues rose 17.4% to €4.8 billion (£4.1 billion) in the year to 30 September compared to the same period last year.

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The retailer said it had “outperformed” the broader retail market despite “difficult” economic conditions such as runaway inflation and higher food and energy costs.

Inflation in the UK is currently at 11.1% for the period to October as consumers switch to discount and non-branded, inexpensive items. At the same time, the cost of fresh food in UK shops rose by 13.3% in October compared to a year ago.

The update comes just two weeks after the group welcomed former chief executive Andy Bond back as chairman following his recovery from illness.

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Trevor Masters, CEO of Pepco, said: “Despite short-term challenges across the industry, Pepco Group has delivered another year of good progress and stable trading performance thanks to our successful and proven strategy.

“We accelerated our profitable store expansion program – our largest source of value creation – and our store remodeling strategy, helping to improve our comparable performance.

“In addition, we have reduced our cost structure and improved back office processes, making us significantly cheaper and more efficient. This has enabled us to increase our sales and increase EBITDA and cash generation.”

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