Value retailer B&M has made a strong start to its new financial year, boosted by a record Easter trading period and further store openings.
In its first quarter to 29 June, the group’s overall revenue surged 21.4% to £967.7m following the inclusion of the Babou chain in France it acquired last year.
The core B&M chain in the UK saw revenues climb 13.8% to £738.9m. Like-for-like sales rose 3.9% after a third consecutive record Easter trading period with sales of seasonal products and Homewares performing “particularly well”.
The retailer ended the period with 632 stores, having opened 13 of the 50 gross (45 net) new outlets planned for this year.
The group’s Heron Foods convenience chain saw revenue from its 287 stores increase by 8.1% to £93.1m with like-for-like sales performance described as “solid”. It opened six new stores in the period and reaffirmed plans to open between 15 to 20 new stores over the financial year.
Meanwhile, revenue in the group’s Jawoll business in Germany increased by 1.9% to £63.1m. However, it was said to have recorded a small negative like-for-like performance due to tough comparatives with the same period last year.
In France, the 96-strong Babou chain generated £72.6m of revenue in the quarter. The group admitted that sales performance had been hit by clearance activity as it brings in new products sourced from the B&M supply chain and reduces the reliance on clothing.
B&M concluded its results statement by saying: “We have had a solid start to the financial year and we remain confident about the group’s outlook and continued profit growth as the year progresses.”
Matt Walton, senior retail analyst at GlobalData, commented: “B&M’s prospects remain positive, as it is set to open a net of 45 stores in the UK in FY2019/20, it will continue to benefit from consumers remaining cautious and is still on course to record profit growth, despite the drag caused by Jawoll.
“However, the level of competition B&M faces remains fierce. Both B&M and Home Bargains have aggressive expansion plans, which will inevitably dampen sales growth for both, and as B&M grows its presence within chilled and frozen food it will be competing more directly with Aldi, Lidl and The Range, who have partnered with Iceland in some stores.
“B&M’s FY2019/20 performance will continue to be buoyed by its enhanced homewares offer, as it goes up against a soft l-f-l comparison, and it should aim to incorporate elements of this refresh across its other ranges to help B&M stand out.”
NAM Implications:
- Hopefully obvious to all NAMs that B&M are perfectly positioned…
- …to optimise the current and foreseeable UK and EU future…
- …especially given the new occupant of 10 Downing Street.
- Watch this space…
