UK customers appear to be worse hit by the cost of living crisis than those elsewhere in Europe, the company behind Poundland has said.
Pepco said British shoppers are cutting back on essential purchases as they face a big hit to their disposable incomes.
It said that in Central and Eastern Europe, the cost of living is being offset by high wage growth, at least in the short term.
In Western Europe wages are not growing, which is pushing down the amount that customers spend. But Pepco singled out the UK as being particularly bad.
It said: “In Western European markets the acute spike in inflation in a stagnant wage-growth environment has quickly resulted in absolute lower spending by consumers.
Through our continued focus on reducing the cost of doing business, we have been able to shield customers from price rises on some of our products at a time of significant inflationary pressure on household budgets
Trevor Masters, Pepco CEO
“Specifically in the UK, the cost of living crisis has impacted customers’ disposable income as they scale back even on essential purchases in the short term.
The business said Poundland revenue rose 11.4 per cent in the first half of last year to €1.1bn (£940m), though on a like-for-like basis it increased by just 3.3 per cent.
Overall sales across the group increased 18.9 per cent to €2.4bn (£2.1bn).
Chief executive Trevor Masters said: “As pandemic restrictions progressively eased it was… encouraging to see the strong return of customers, and the continuation of this into Q3 (the third quarter) resulted in the group’s like-for-like sales rising above pre-Covid levels for the comparable period three years ago.
“We have emerged a stronger, more resilient operator from this unprecedented recent period by being a bigger group through accelerating our store openings, a better retailer through store and proposition renewal, and a simpler business through scale-led cost reductions.
“We have maintained our market-leading position on prices and through our continued focus on reducing the cost of doing business, we have been able to shield customers from price rises on some of our products at a time of significant inflationary pressure on household budgets.”