Pepco runs deep clearance sales across Europe

The mechanics were simple but unusually punitive: Pepco’s extra 80% discount applied only to items already marked down, and only when customers bought at least two qualifying products. That is how a women’s T-shirt that once cost 6 euros ended up at 26 cents, while children’s shorts sold for 8 cents and an infant outfit for 16 cents. Similar prices were reported for homeware and toys, including ice-cube trays at 10 cents and party sets at 14 cents.

The campaign was not confined to Slovakia. Pepco ran comparable promotions in the Czech Republic, Poland, Latvia, Spain, Hungary and Romania, suggesting a coordinated clearance effort rather than a local fire sale. That broad rollout fits with the group’s stated strategy of trimming a too-broad assortment, reducing legacy stock and freeing shelf space for newer merchandise.

For investors, the key point is that the markdown frenzy appears to be strategic, not distress-driven. Pepco Group said in its first half of fiscal 2026 that revenue rose 5% to about 2.47 billion euros, gross margin improved to 49.7% and adjusted net profit climbed more than 50% to 198 million euros. The company also plans to open at least 600 new stores in western Europe between 2027 and 2030, indicating that it is still in expansion mode and using promotions as an inventory tool, not a survival tactic.

That makes the sale a useful read on the economics of discount retail. Deep price cuts can boost footfall, accelerate stock rotation and sharpen a chain’s image as a destination for bargains. The risk is that extreme promotions train consumers to wait for clearance events, compress margins on slower-moving categories and leave sellers with a quality problem if customers interpret ultra-low prices as a signal of low durability.

The broader backdrop is a retail market where consumers remain highly price-sensitive and competitors are racing to defend share with short-term promotions. For Pepco, the near-zero pricing is less about desperation than discipline: liquidate old stock quickly, protect the economics of the core business and keep the pipeline clear for new assortment. For investors, the question is whether that discipline can be sustained as the company expands, or whether more frequent markdown campaigns will become a permanent feature of the model.