B&M’s run of four consecutive quarters of falling sales in the UK has come to an end as good weather boosted demand for its outdoor ranges.
In its first quarter period to 28 June, the discounter’s total group revenues increased 4.4%, driven by store openings and a positive like-for-like performance in the UK and France.
B&M UK saw revenues increase 4.7% to £1.31 billion, with like-for-like sales growing 1.3% despite a decline in the FMCG category, where work is ongoing to strengthen its proposition. However, the company noted that performance in its Health & Beauty and Cleaning categories was “stronger” following the improvements the business has made in “operational execution”. Meanwhile, General Merchandise sales increased after Garden, Toys, and DIY categories performed well.
B&M highlighted that average selling prices (ASP) deflation led to a lower trading gross margin year-on-year in some General Merchandise categories. However, it stated that it will begin to annualise these ASP effects in the second quarter, with new ranges having higher margins.
B&M opened 18 gross stores in the UK during the period (10 net), with it on track for 45 gross new store openings in the year.
B&M’s operation in France continued to make solid progress with like-for-likes up 1.1% and total revenue growth of 7.6% to £136m after four new stores were opened.
Heron Foods saw revenues fall 0.4% to £138m. However, the group stressed that the value-oriented frozen food chain continued to trade profitably, and efforts to strengthen its sales performance were ongoing.
Meanwhile, the company announced that its Ellesmere Port import centre has recently commenced operations, and it will shortly begin the planned relocation of its Middlewich distribution centre ahead of the lease expiry in August 2026.
Tjeerd Jegen, the former Tesco exec who took over the CEO role at the business last month, commented: “My early days spent listening to and learning from our passionate colleagues and customers have underlined for me the strength of our value-focused model, which is more crucial than ever in the current challenging economic climate.
“While B&M UK’s like-for-like sales are growing, I see a significant opportunity and requirement to sharpen our commercial and operational execution as we move towards and beyond the Golden Quarter. Looking ahead, my focus is on building on our strong foundations, leveraging our market position, and continuing to deliver exceptional value for our customers.”
NAM Implications:
- B&M are accessing available growth.
- And will continue to do, weather permitting…
- Meanwhile, they will focus on restoring average trading gross margins…
- ..via new ranges having higher margins, consumers permitting.
- Deep down, B&M’s value-focused model is made for the current economic climate.
- Fingers crossed the resulting benefits will kick in…
