Following on from yesterday’s dismal results from John Lewis, a trading update from B&M suggests that even value-orientated retailers found the going tough over the Christmas period.
For the 13-week period to 28 December, B&M’s total revenue in the UK grew 8.8% to £957.4m but like-for-like sales rose just 0.3%. The group highlighted that the “challenging” market conditions had led to disappointing sales performance across the toys and seasonal confectionery categories, which offset strength in its home departments.
The group also blamed the weaker-than-expected figures on its decision not to engage in early discounting activity and remain focused on cash margin.
B&M opened 12 net new stores during the period, taking its total to 657.
B&M Chief Executive Simon Arora remained upbeat, saying: “Against the backdrop of a difficult UK retail environment with reduced shopper footfall and political uncertainty, our core B&M UK business generated continued growth and delivered a record level of peak season sales.”
He added: “Overall the business delivered a good quarter operationally. Costs were well controlled and, combined with our usual strong focus on cash gross margins, yielded a profitable outcome. We were also able to exit the period with normal seasonal inventory levels.”
Meanwhile, the group’s Heron Foods supermarket chain saw its sales over the quarter grow by 6.2% to £95.6m. Five net new stores were opened in the period, taking the total to 295.
French business, Babou, increased revenues by 29.3% on a constant currency basis to £85m. Revenues in the group’s German chain Jawoll fell 1.5% to £53m as the group continued with the strategic review process it announced in November.
NAM Implications:
- Still a good bet for NAMs in appropriate categories.
- Besides, NAMs need to compare these results with the mults’ performance…
- …and include discounter & Amazonian online…
- …for a vision of UK markets in 2020.
