The Works capitalises on spending squeeze with store expansion

High street discounter The Works has announced expansion plans as it moves to cash in on greater demand for bargains amid the Brexit-linked squeeze on consumer spending.

The chain, whose offering includes craft, toys and books, said it wanted to open 60 new stores - creating 600 new jobs over the next 12 months.

It currently has 398 high street and out-of-town stores across the UK and plans to grow its estate to 650 by 2022 - supported by a newly-opened distribution centre in the West Midlands.

The Works, which has grown over the past 10 years despite stiff competition, said it planned to spend £5.3m on the new openings with a further investment of £1m being allocated to refurbishing its existing store estate.

The company said it was "bucking the trend" in slowing high street sales following the Brexit vote, with its last financial year generating growth of 9%.

There is increasing evidence that shoppers are hunting bargains as the effects of higher inflation and lacklustre earnings growth take their toll on family budgets.

A report by Kantar Worldpanel this week suggested Lidl had overtaken Waitrose in terms of market share in the grocery sector as shoppers become more cautious.

The discount sector, particularly chains such as Lidl and Aldi and pound stores, became more familiar faces in town centres as retailers came under pressure in the wake of the financial crisis.

Retail experts have suggested that the difficulties facing consumers this year will bolster pressure on the sector to maintain competitiveness through weak margins.

Chief (Taiwan OTC: 3345.TWO - news) executive of The Works, Kevin Keaney, said: "Our discount proposition, coupled with our huge range of exciting products, is proving a real hit with consumers and helping us to continue rapid growth even when overall spending confidence is low.

"In contrast with many other retailers, we're seeing surging sales on the high street, with plans to grow our estate by a further 60 stores over the next 12 months.

"We're also experiencing fantastic growth online, with online sales growing by 35% over the last year.

"We're bucking the trend and committed to sustaining this growth through further investment over the next 12 months and beyond, as we deliver our plan to become one of retails best growth stories."