Poundland owner Pepco has said consumers in the UK have been particularly wounded by higher costs of living, impacting spending.
Pepco, which also owns discount retailer Dealz, said higher wages in Central and Eastern European markets were significantly offsetting inflationary pressures.
However, in the Western European markets, stagnant wage growth had led to shoppers paring back spending on consumer goods.
In an update, the company said: “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.”
“Our continued focus on reducing the costs of doing business means that we are able to offset some of our input inflation, allowing us to protect price for all of our cost-conscious customers whilst also absorbing some of the input inflation ourselves as evidenced by the decline in our gross margins.”