Pepco Group, which owns Poundland in the United Kingdom, Dealz in Ireland and the Pepco chain across Europe, said that while absolute levels of inflation were higher in Central and Eastern European markets, higher wages in these areas significantly offset this in the short term. term. However, the company added: “In Western European markets, the sharp rise in inflation in a stagnant environment of wage growth has quickly led to completely lower spending by consumers. “In the UK in particular, the cost-of-living crisis has affected consumers’ disposable income, as they are limited to even key markets in the short term.” The discount warning came as furniture retailer DFS said its orders had hit since April – with orders falling by about 2% to pre-pandemic levels, which analysts say were around 50%. reduced compared to last year. Shares of the specialist on the couch fell almost 16%, as analysts said they cut earnings expectations by more than a third. Pepco said its profit margins had been hit as it tried to absorb some cost increases. He added that he was trying to make cuts in order to keep prices low for “conscious customers”. Sales rose nearly 19% in the first half to March 31, and profits rose nearly 29% as 235 new stores opened across Europe. Trevor Masters, CEO of Pepco Group, said: “We have maintained our market leadership position and through our ongoing focus on reducing business costs, we have been able to protect our customers from price increases on some of our products. a period of significant inflationary pressure on household budgets “. Subscribe to the daily Business Today email or follow the Guardian Business on Twitter at @BusinessDesk Pepco said sales had risen above pre-pandemic levels in the eight weeks since the end of the year, with underlying Poundland sales averaging 4.3% weekly. He said the invasion of Ukraine, which borders three of the group’s largest operating areas, helped boost sales due to the influx of refugees. However, he said the rise had been “offset to some extent” by the war “which has exacerbated the existing supply chain disruption and headwinds”.