Poundland's Christmas ruined by rival discounts and online

Poundland revealed it had a dreadful Christmas as shoppers chose to stay at home and buy their gifts online, while heavy discounting elsewhere also wooed potential customers away.

Shares in the bargain store fell by 11.5% to 170p in early trading as the retailer said that its full-year profits would come in at the lower end of market forecasts.

Poundland had already warned of volatile trading two months ago but the company said on Thursday that footfall on Britain’s high streets was lower than last year.

Chief executive Jim McCarthy also admitted the chain could have done better, after it ran out of key lines including selfie sticks, cushions and glass baubles.

He said: "We were the first to flag that the shape of Christmas looked different and unfortunately that was the case in December."

Sales in the 13 weeks to December 27 were up 29.4% to £424.9 million but this was due to the takeover of 99p Stores which completed last year after a lengthy investigation by the competition watchdog.

McCarthy declined to reveal the like-for-like fall in sales, but analysts predicted this would be about 4% down.

McCarthy also revealed that the 99p takeover had been a greater challenge than expected: "The takeover was, in hindsight, more of a distraction and we took over a business that was pretty much devoid of stock."