Empty shelves at B&M as discounter runs out of stock

DISCOUNTER B&M warned the shelves in some of its stores have been left bare because it has been opening shops too fast and has run out of stock.

Shares in the firm – which is chaired by former Tesco chief executive Sir Terry Leahy

(pictured) – fell 3.49pc despite a strong rise in half year profit.

The Woolworths-style discount chain, valued at £3bn in its stock market float last year, has its tax domicile in Luxembourg. The main shareholders have links to the tax-efficient Cayman Islands.

Chief executive Simon Arora boasted the firm had opened 47 new shops in the past 26 weeks, a record rate for B&M.

But rapid expansion has come at a cost.

Arora said that speed of growth has ‘had some challenging shortterm consequences’. ‘Our new store programme has been larger in recent months than we had originally planned,’ he said. ‘We have experienced belownormal service levels to stores as we approach peak trading.

‘This will have a short-term impact on in-store availability,’ he added, which in plain English means there are not enough goods on the shelves. This has echoes of Leahy’s time at Tesco, where he presided over a rapid expansion in store numbers.

The grocery giant was forced to close 50 shops this year due to falling sales and profits, and also scrapped plans for a number of sites earmarked for development.

Leahy said: ‘B&M has made good progress in the first half of the financial year towards its goals of reaching 850 UK stores and creating longer term growth in Germany.’

B&M shares fell 11.6p to 308p despite almost doubling pre-tax profit to £77.8m for the 26 weeks to September 26, from £41.7m the previous year.

Sales also increased to £930m from £739m and it hiked the interim dividend to 1.6p-a-share from 0.9p. It plans to open 50 stores next year but said it has invested in new warehouses and systems and will be able to cope with future expansion.