Matalan 'well positioned' to cash in on slowing economy as it posts rising sales
Discount retailer Matalan has said it is "well positioned" to cash in on Britain's slowing economy and a Brexit squeeze on consumer spending as it posted rising sales.
In a trading update for the 13 weeks to May 27, the firm reported a 1.3% increase in revenue to £253.4 million, driven by a 21.5% increase in full price sales.
Earnings rose from £16.2 million to £22.3 million in the period, and chief executive Jason Hargreaves pointed to a climate of uncertainty and tough times for shoppers in a "challenging market".
He said: "Consumers face tough times at present. Inflation is rising and they are surrounded by economic uncertainty. In such a climate Matalan is well positioned to offer fantastic design and quality at outstanding value.
"We don't expect the retail environment to improve in the near term, so remain cautious, but are pleased with how the business is progressing with improvements to the ranges, store estate, and strong growth in the online channel."
His comments come as consumers see their spending power come under increasing pressure from soaring inflation triggered by the collapse of the pound following Britain's vote to leave the European Union, which has in turn had an impact on high street sales.
Recent data from GfK shows that consumer confidence has collapsed to post-Brexit vote lows, but d iscount retailers tend to benefit when consumer spending comes under pressure.
Mr Hargreaves said that ladieswear in particular has had a "great season", as well as highlighting the growth of online and Matalan's next day click and collect service.