Poundland today announces it has acquired Fultons Foods (Fultons), the north of England frozen food retailer, in a move that will help accelerate its transformation programme.
The UK’s favourite discount retailer has been working closely with Fultons for 12 months developing its chilled and frozen food range and building a distribution network to serve stores.
This partnership has enabled Poundland to roll out frozen and chilled foods to more than 70 of its stores and the acquisition will now enable Poundland to significantly extend the offer to another 40-plus stores by December, beginning this month in Luton.
The transaction demonstrates the intent of Pepco Group, the owner of Poundland, to invest in widening the customer offer in Poundland while also improving its operational gearing, primarily through reducing the discount retailer’s in-store rents. Together these will build both sales and profit, as well as creating new jobs in the UK.
While the acquisition will allow Poundland to step up its frozen and chilled rollout, it will also allow it to do more than simply almost double the number of stores carrying these ranges.
Alongside extending the range to a further 40-plus stores in 2020, Poundland plans to invest in excess of £25m over the next two years in its chilled and frozen operation to:
- Convert the most appropriate Fultons stores into a full Poundland format, retaining a frozen and chilled offer in each location.
- Establish Fultons’ Barnsley base as its National Frozen Distribution Centre and build the infrastructure at its Harlow DC to bring its frozen and chilled food offer to stores across the south of England.
- Create around 1,000 full and part time roles through the introduction of chilled and frozen in stores and the transformation of the distribution centres in Barnsley and Harlow.
Poundland expects to bring its chilled and frozen offer to a further 150 stores in the 2021/22 financial year and to as many as 500 stores over the next two years, making it an increasingly significant player in the near-£20 billion UK chilled and frozen food market.
Both Fultons co-owners will remain involved in the business. Karen Rees will become managing director reporting directly to Poundland MD Barry Williams. Kevin Gunter will continue in an advisory role for six months. All 800-plus Fultons colleagues will join the Poundland family this month with no changes to their terms and conditions.
Poundland’s transformation strategy
The acquisition follows the country’s most popular discount retailer recently unveiling a wider transformation programme to bring customers even more choice and amazing value.
These include bringing its PEP&CO fashion brand to more than 310 locations and last month rolling out its new PEP&CO Home ranges to all stores, step-changing its general merchandise offer.
These transformation plans also include changes to stores and the introduction of wider ranges in all categories at simple prices.
As part of this project, Poundland is refreshing and refurbishing stores, pressing ahead with new stores and relocations to bring Poundland to new towns such as Banbury and Bulwell and expanding in existing locations such as Telford and Tunstall.
Poundland will also complete the first phase of its chain-wide simple pricing roll-out next month, ensuring every category has extended ranges at prices above and below £1 to ensure customers can find more of what they buy week-in, week-out under one roof.
As well as investing in stores, Poundland’s transformation plan also includes the pilot of new free from ranges and beers, wines, and spirits in selected stores.
Barry Williams, Poundland managing director, said: “We couldn’t have developed our chilled and frozen ranges without Fultons’ expertise and now is the right time to move to the next level and bring the team on board.
“By combining our experience, we can accelerate our frozen and chilled rollout and bring the amazing value it offers to more of our customers across the UK.”
Fultons’ managing director Karen Rees said: “For the last 12 months we’ve been proud to partner with Poundland, but even prouder that today we become family.
“We already know the Poundland customer loves our frozen and chilled foods offer – and we’re excited to know our people will be able to play a bigger part in Poundland’s transformation story”.
Fultons’ chairman Kevin Gunter said: “After leading the business for 24 years, I’m pleased we’ve been able to agree terms with Poundland who are committed to a renewed period of growth and investment. I’m looking forward to contributing in an advisory role over the next six months”.