Poundland is battling to keep shelves stocked after major consumer goods suppliers including Nestlé and Procter & Gamble reportedly tightened credit terms in response to mounting concerns over the retailer’s financial stability.
The high street discount chain, which operates about 800 stores and employs 16,000 staff across the UK and Ireland, was sold last month for just £1 to Boston-based restructuring specialist Gordon Brothers. The deal marked the end of Pepco Group’s ownership, which had held Poundland since 2016.
Following the sale, Gordon Brothers unveiled a proposed recovery plan that includes closing 68 stores and slashing rents on dozens more. That announcement has triggered alarm among key suppliers, with several reportedly reducing payment windows or restricting credit entirely – a move that is already being felt in stores.
Products from consumer goods giants such as Procter & Gamble, including Oral-B, Febreze, and Always, are now harder to find in Poundland stores, particularly in London. Meanwhile, Nestlé confectionery, including chocolate bars and multi-packs, has become scarce in some branches, with staff confirming a slowdown in deliveries. Nestlé is understood to have cut back on credit lines, while P&G has shortened its payment deadlines.
Although Unilever has not formally changed its payment terms, some of its products – including Cif cleaning sprays and Dove personal care lines – were either limited or missing entirely in several shops this week.
Supply chain experts say that when companies enter financial distress or restructuring, suppliers often respond by tightening credit or demanding upfront payments to protect themselves from potential losses. This can choke off stock flows and worsen the company’s liquidity, further complicating recovery efforts.
While trade creditors are not directly involved in the legal restructuring plan, Poundland is actively working to reassure suppliers. A meeting was held this week at its Walsall head office, where Gordon Brothers briefed vendors on their recovery strategy and timeline.
A spokesperson for Poundland said: “Our expectation is that any credit limitations for suppliers will unwind in time after we have the opportunity to implement the restructuring and recovery plan we shared last month. We have been briefing suppliers this week about those plans and appreciate the support they’re providing.”
The restructuring plan is currently going through court approval, with a final ruling expected by the end of August. At a hearing earlier this week, a judge gave approval for the classification of creditor groups – a key step in the legal process.
While the company has insisted it remains committed to its recovery strategy, the pullback by key suppliers may add further strain as it tries to stabilise operations and reassure both investors and customers.
Industry insiders say restoring confidence will be critical – both on the shopfloor and among supply chain partners.
Unilever and Nestlé declined to comment on the changes, while Procter & Gamble did not respond to media enquiries.
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Poundland faces stock shortages as big brands tighten terms following £1 sale