Poundland owner Pepco Group is considering the potential sale of the discount chain as cost pressures mount.

It is understood that Pepco Group is looking into ways to separate itself from Poundland, which has suffered a decline in sales this year.

The Polish owner is also moving away from fast-moving consumer goods to focus on its higher-margin clothing and general merchandise business.

Pepco Group chief executive Stephan Borchert told Reuters that he was confident the discounter’s future would be decided by this September, and that there are “definitely interested parties for this business”.

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He added that all options were being considered but that a sale is “possibly a very good option since we believe that the business will do better with a new owner”.

Changes introduced by Chancellor Rachel Reeves in her first Budget mean that, from April, employers’ National Insurance contributions will rise from 13.8% to 15% on a worker’s earnings above £175 a week.

Pepco Group said this change would “add further pressure to Poundland’s cost base”.

As part of the group’s plans, Borchert will assume responsibility for running Pepco, while former Poundland managing director Barry Williams, who became Pepco MD in September 2023, will return to the role of MD for Poundland.