Welcome to the new Woolies...
Budget store B&M is winning the retail war
THERE’S something familiar about the whole thing.
The aisles full of a bit of this and a bit of that. Housewares here, some gardening gadgets there, DIY tools within a few strides of tasty deals on food and drink.
Oh, and a pick- and- mix to munch on.
It’s little wonder that B& M has been dubbed “the new Woolies”.
But while Woolworths, a High Street favourite for decades, struggled its way to an ignominious end, B& M is the new retail darling.
In the toughest of environments it’s not just surviving but thriving. And thriving with no expensive advertising campaigns but a policy of relying largely on word of mouth.
From just 20 or so shops when the recession hit back in 2008, there are now more than 500 stores, both here and in Germany where it’s also a big player. And it’s far from finished. It’s currently opening a store a week, with the 50- a- year tally driving it towards its aim of 850 outlets.
“They clearly know what they’re doing,” said Professor Leigh Sparks from the Institute from Retail Studies at the University of Stirling,
“There has been a big discount change over the last decade or so in the UK.
“Poundland has been one of the flagships and B&M and others in the market, like Home Bargains, have really gone quite aggressively into that market.”
But Poundland, once the seemingly un- dimmable shining light has found things a bit tougher of late, with a sharp fall in profits.
It has blamed this partly on taking over former rival 99p Stores, and Poundland has itself just been taken over by South African giant Steinhoff.
B&M, by contrast, has gone from a net loss of £19million in 2014 to a profit of £ 125million thisis year.
Its annual salesles now top £2 billion.
BBut Professor Sparks says the expansion plans of disdiscount chains, added to the huge numbers of existing properties – PouPoundland has 900 stores – meanmeans it’s very much about the susurvival of the fittest.
“TheThere is a bit of over-playinging of theth discount market at the minute,” insists Professor Sparks.
“Most companies have been very ambitious and some, like Poundland, have begun to lose their way slightly.
“It’s going to be a question of whether this pace can be sustained.
“Those that have a clear position and win in the consumer’s mind will probably meet their ambitions.
“But it will be at a cost of the others in the market.”
One of the driving forces behind the rise and rise of B& M is Sir Terry Leahy.
Appointed as chairman in 2012, he’s the former boss of Tesco, and was at the helm of Britain’s biggest retailer during its glory years when it seemed every community wanted to be a “Tesco town”.
“He will have brought clarity of thought from his experience over a long period of time,” said Professor Sparks.
“And clearly there is some confidence in the City as a consequence. He knows how a business has to be managed and operated.”
Just like Tesco used to be welcomed with open arms, having a B&M to hand is viewed as