Poundland Faces Empty Shelves as Major Suppliers Tighten Credit Terms Following One Pound Sale

Leading suppliers have imposed stricter credit terms on Poundland, causing significant stock shortages across its 800-store network. The discount retailer, recently sold to US-based Gordon Brothers for £1, is grappling with inventory challenges as key manufacturers react to proposed restructuring plans.

Consumer goods giants Procter & Gamble and Nestlé have notably reduced their payment windows, resulting in visible gaps on store shelves. P&G products, including Lenor fabric conditioner and Oral-B toothpaste, are particularly scarce across London locations. Nestlé’s confectionery lines have seen similar disruptions, with store staff reporting decreased delivery frequencies.

The situation stems from Gordon Brothers’ restructuring proposal, which includes 68 store closures and widespread rent reductions. These plans have triggered concern among suppliers, leading to tighter credit controls and modified payment terms. Such restrictions typically indicate declining confidence in a retailer’s financial stability.

While Unilever maintains its original credit terms, its products, including Cif cleaning supplies and Dove toiletries, show limited availability in numerous locations. The impact of restricted supplier credit is creating additional pressure on Poundland’s cash flow and operational capabilities.

Gordon Brothers awaits court approval for its restructuring strategy, with a final decision expected by August’s end. The company has initiated supplier briefings, including a recent meeting at its Walsall headquarters, to outline recovery plans.

A Poundland spokesperson expressed optimism about the situation: “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.”