Poundland’s owner warns that labour’s tax rises will add pressure, pushing the chain towards a sale.
Poundland’s future is in jeopardy as its owner considers selling the discount retailer, blaming upcoming tax hikes from Chancellor Rachel Reeves’ Budget.
Pepco Group, the Polish parent company of Poundland, revealed that sales across the UK’s 825 stores dipped in January and February. Now, with the employer National Insurance (NI) rise set to kick in from April, the company warns that its costs will soar even further.
Embed from Getty Images“From April 2025, the UK government’s additional tax changes announced in the Budget will also add further pressure to Poundland’s cost base,” Pepco said.
The move comes amid growing concern from retailers over Labour’s economic policies. Big names like Tesco, Amazon, Greggs, and Next previously urged the Treasury to rethink the NI hike and minimum wage increase, warning of job losses, store closures, and price rises. Despite the backlash, Reeves has defended the changes as “the right decisions in the national interest.”
Poundland Up for Sale?
Facing mounting financial strain, Pepco is now exploring ways to offload Poundland. Stephan Borchert, CEO of Pepco Group, confirmed to Reuters that interested buyers are already circling.
“There are definitely interested parties for this business,” he stated, expressing confidence that Poundland’s fate would be settled by September. “A sale is possibly a very good option since we believe the business will do better with a new owner.”
As part of the restructuring, former Poundland boss Barry Williams, who had been running Pepco since September 2023, will return to lead the UK chain.
Why Is Poundland Struggling?
Poundland’s troubles are part of a wider retail crisis. Businesses across the High Street are grappling with rising costs, dwindling consumer spending, and new tax burdens imposed by Labour’s Budget.
Retailers have been particularly vocal about the employer NI hike, which will make it more expensive to keep staff. While the government insists tax rises are needed to protect public services, business leaders argue they will stifle growth and lead to job losses.
Pepco’s long-term goal is to operate under the single Pepco brand, focusing on its more profitable clothing and general merchandise businesses. It is also considering selling its successful Dealz Poland chain.
The Poundland sale, if it goes ahead, could mark a major shift for the UK’s discount retail sector. With potential buyers already interested, the question now is—who will take over one of Britain’s most recognisable budget chains?
