Poundland smashes £1bn sales - as chief attacks regulator for delaying 99p Stores takeover

Chief executive Jim McCarthy said the Competition and Markets Authority’s decision was “surprising and disappointing”

Poundland competes in many fields, from food to DIY, making it hard for regulators to define (PA)

Poundland has taken just 25 years to go from the sale of its first £1 product to selling more than a billion products in a single year, as annual sales smashed the £1bn mark for the first time.

However, the celebrations were put on ice over the escalating recriminations between the retailer and the Competition and Markets Authority watchdog, which has said Poundland’s takeover of the 99p Stores chain could be breaching the rules.

Jim McCarthy, its chief executive, attacked the CMA’s decision, which means either 80 stores must close or a longer four-month phase two investigation must take place, calling it “surprising and disappointing”.

The CMA said with 99p Stores gone, Poundworld would be the only competitor to Poundland and could lead to the retailer hiking its prices. However, Mr McCarthy hit back.

He said: “The notion that a company like Poundland would take advantage of putting its prices up when there’s one less operator in an area is beyond belief. We compete with everyone.

“Customers are using more and more retailers and challengers, so the traditional view of retail has changed.”

Poundland has until Thursday to formally respond to the CMA, but Mr McCarthy explained that the business could be given an extra three weeks’ grace if needed.He said all options were on the table, but hinted that he would be keen to go down a more in-depth formal review, which could allow the bosses to change the CMA’s mind.

Mr McCarthy explained: “If it goes to a phase 2, it is a different set of people from the organisation [CMA], so you’re in front of a different set of people who are obliged to take an even handed view.”

It comes as the company revealed like-for-like sales for the year to end of March were up 2.4 per cent to £1.11bn. Full-year results are not released until next month but bosses said they expected to hit about £43.8m.

The business also said its planned 60 new store openings all took place in the last year and bosses plan a similar number next year. Previously, the company has said it wants to have 1000 Poundlands across the UK, and is also focusing its attentions on its overseas venture, Dealz, where there are multiple price points.

However, Mr McCarthy said there are no plans to change the single price point in the UK, despite the problems is has caused with the CMA.