Discount retail chain achieves its best ‘Golden Quarter’ performance

Simon Arora, B&M
Simon Arora

Discount retail chain B&M continues to thrive, despite difficult trading conditions, it revealed in a third quarter trading update today.

The South Liverpool-based group said the 13 week period, to December 28, 2019, delivered continued growth and a record level of peak festive season sales in what it terms its ‘Golden Quarter’.

Group revenue rose by 9.3% at constant currency.

B&M UK stores revenue growth of 8.8%, including like-for-like growth of 0.3% for the quarter, was against the backdrop of a challenging broader retail market and the group’s decision not to engage in any early discounting activity

Fifteen gross new B&M UK stores opened in the quarter, 12 net of relocations, while six planned gross new store openings at the B&M UK stores business are planned for the final quarter.

Heron Foods, the value convenience store chain, continues to trade well, building on a good performance in the prior year with solid like-for-like sales growth and net five new stores opened in the quarter.

Progress continued to be made at the group’s French operation, Babou, on the introduction of directly sourced new product ranges. Babou generated revenues of £85m in the quarter.

However, the poorly-performing German chain, Jawoll, saw sales revenues fall 1.5% on a constant currency basis for the quarter. The strategic review announced on November 12, 2019, into the future of Jawoll is ongoing.

Chief executive Simon Arora 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% like-for-like 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.”

He added: “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.

“I would like to thank our teams across all our fascias for their hard work in delivering the biggest ever ‘Golden Quarter’ for the B&M Group.”