Poundland Group PLC (LSE:PLND) owner Pepco has highlighted the UK as particularly hard hit by the cost-of-living crisis, saying it has squeezed customers' disposable income and led them to "scale back even essential purchases in the short term".
South Africa's Pepco Group, which also ows Dealz in Ireland and its eponymous chain in Europe, is the latest retailer to warn that inflation is taking a serious toll on consumers, in an earnings statement.
It said a high wage growth has offset the cost of living in central and eastern Europe, at least for the short term, but shoppers in the UK are especially hurt by high prices due to stagnant wages.
In order to maintain its prices for "cost-conscious customers", Pepco said it had cut back on some costs and put a dent in its profit margins.
On the release of its interim results today, the group said trading had returned to 'pre-Covid levels' and revenue climbed 18.9% from €2bn to €2.37bn for the half year ending March 31, with like-for-like sales climbing 5.3%.
The company reported pretax profits of €144mln for the period, up from €112mln.
Another budget retailer in the UK, B&M European Value Retail SA (LSE:BME), has also warned its earnings would fall this year as higher living costs restrict consumer spending, especially on big-ticket items.
Tesco PLC (LSE:TSCO), the country's biggest supermarket, has said some British families are suffering from "real food poverty" due to rising prices.
The cost-of-living hit has punctured the post-pandemic spending boom with retail sales slipping 1.1% in May, compared to a year ago.