Buy now, pay later firm Zip Co says it will cope with a pullback in discretionary spending as the economy turns down, with more customers using its services to pay for everyday items such as fuel and bills.

Zip continued its retreat to core markets in Australia and the United States, exiting the United Kingdom to reduce cash burn and pledging to review its footprint in more markets, after posting a $1.105 billion loss on impairment charges related to its recent acquisitions and expected lower growth.