Discounter B&M reports ‘pleasing’ end to year as it pledges to open more UK stores
B&M BARGAINS hailed a “pleasing finish” to the year yesterday after reporting a jump in festive sales, and said it would look to open more UK stores despite uncertain trading conditions.
Total sales at the discount retailer climbed 12pc to £1.08bn in the three months to Dec 28, while UK sales rose 4.5pc to £874.5m.
B&M’s December sales at stores open more than one year were up 1.2pc, but fell 1.6pc across the three months – a result blamed on a “difficult November”.
The group enjoyed 3.9pc growth in the same period last year. Shares edged up 0.3p to close at 311p yesterday. Chief executive Simon Arora, who founded the company with his brother Bobby, said: “Despite the broader economic uncertainty over the last quarter, B&M is on track to deliver a record year for both sales and earnings.
“The business’s ability to manage profitability through uncertain trading conditions is testament to the resilience of the business model.”
Mr Arora said B&M “didn’t need to resort to discounting” during the Black Friday period, adding that the discounting day was no longer important for bricks-and-mortar retailers.
Toy sales were in “good shape” in the quarter, aided by the collapse of competitors such as Toys R Us, he added.
B&M opened net 20 new stores in the period and plans another 56 by the end of this year, taking its total to 650.The company has previously said it wanted to have 950 stores across the UK.
B&M Bargains has recently undergone a European expansion plan buying French discount retailer Babou for £80m. The business’s German chain, Jawoll, enjoyed a sales increase of 4.9pc to £55.3m in the period.
Sales at the Yorkshire-based budget chain Heron Foods, which B&M bought last year, rose 12.9pc, adding £89.9m in revenue.
Although it does not sell fresh food, B&M’s range of cut-price branded staples such as biscuits, crisps and breakfast cereals poses an additional threat to the “big four” of Tesco, Sainsbury’s, Morrisons and Asda, which are already battling with competition from Aldi and Lidl.
Analysts at Numis said B&M’s quarterly results were resilient due to “trade picking up strongly in December”, offsetting the poor November sales.
‘Managing profitability through uncertain trading conditions is testament to the resilience of the model’