Soap giant suffers from spending squeeze

IMPERIAL Leather owner PZ Cussons has warned over profits as consumer confidence dives in the UK and the firm faces tough trading in Nigeria.

Earlier this year the group said that Brexit-fuelled inflation was encouraging shoppers to swap brand name soaps for discounted rivals.

PZ Cussons warned that this will result in full-year profit falling “short of expectations”, with the board pencilling in a range between £80m to £85m.

“The UK washing and bathing division has continued to experience lower levels of purchases, reflecting consumer caution across all retail channels caused by economic uncertainty and inflation outstripping wage growth,” the firm said.

“Whilst new product launches have been well received, they have not had the desired uplift in sales to compensate for the wider volume and margin shortfall.”

PZ Cussons shares took a hammering following the announcement, falling 25% to 207.6p.

British households have faced a sustained squeeze on their spending power from a jump in the cost of living and paltry wage growth.

PZ Cussons, which also owns St Tropez sun tan lotion and Original Source shower gel, is now embarking on a number of initiatives to get back on track.

These include a reassessment of its operating model to further reduce overheads and a review of product costs such as packaging.