European discount retailer Pepco Group has announced its decision to discontinue operations in the Austrian market.
The strategic move follows in-depth performance reviews that indicated the expected returns in Austria would not meet the company’s benchmarks.
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Pepco “does not foresee that the Austrian market will reach the appropriate level of returns expected.”
The UK-headquartered group, known for its prudent growth strategy, regularly evaluates the performance of its operations.
Pepco made its entry into Austria in September 2021, inaugurating its first two stores in Centre 21 in Wien and Cine Nova in Wiener Neustadt.
It currently operates 73 Pepco stores across the country.
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By GlobalDataThe retailer expects the withdrawal to enhance its cash flow and underlying profitability for 2024, and to allow it to allocate resources and attention to other markets with higher return potential.
Despite the exit, the group’s commitment to its growth strategy in Western Europe remains unchanged.
The decision will not affect Pepco’s operations in other territories.
The Warsaw-listed company, which owns the Pepco, Poundland and Dealz brands, reported a robust presence with 4,832 stores at the end of December 2023.
In its fiscal 2024 first-quarter results announced in December 2023, Pepco reported an 11% increase in constant currency revenue growth, reaching a record €1.9bn ($2.0bn).
