B&M sales growth slows in Q3 amid ‘challenging’ retail market

Speke-based retail, which operates more than 650 UK B&M stores, is till performing significantly ahead of much of the UK retail sector. Tony McDonough reports

B&M
Head office of retailer B&M in Speke, Liverpool

 

Liverpool-based national retail chain B&M says its sales growth in the run-up to Christmas was slower than anticipated amid a “challenging” market.

B&M, which has its headquarters in Speke in South Liverpool, said revenues in its 650-strong UK store network in the 13 weeks to December 28, came in at £957.4m, a like-for-like increase of 0.3% against the same period in 2018.

The business resisted the temptation to introduce early discounting. Total sales in the B&M outlets grew 8.8%, slower than the in the first half of the year. The company shares fell in early trading on Friday. However, the business continues to perform significantly ahead of much of the UK retail sector.

B&M also operates 98 Jawoll outlets in Germany 99 Babou stores in France and 290 outlets under the Heron frozen food brand in the UK. In all, the group has more than 1,140 retail outlets. Total group revenues for the period were just under £1.2bn – a rise of 9.3%.

The company has implemented a turnaround strategy at Jawoll which has been hampered by problems with distribution and poor sales, resulting in an impairment charge of £59.5m announced in the publication of the group’s full-year results in November.

Simon Arora, chief executive of B&M, said: “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.

Cumulatively, B&M UK has achieved +2.3% LFL sales growth during the financial year to date, albeit with a slower performance than anticipated during the run up to Christmas. 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. Our new store programme delivered 15 gross and 12 net new B&M UK stores in the quarter, and this year’s openings as a whole have performed better than expectations.

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