Price cuts hit Booths’ profits
EH BOOTH, the Lancashire-based grocery retailer, saw annual profits hit by the consumer spending squeeze and refinancing costs, newly-filed accounts reveal.
The Preston company, founded in Blackpool in 1847, is due to open its 29th store in Milnthorpe, Cumbria next week, said it had seen “modest sales growth” of 1.3% in the year to the end of March, despite two new stores opening.
The openings at Penrith and Manchester’s MediaCity, helped sales increase to £273m.
Profits at the company, which also has shops in Cheshire, Lancashire and Yorkshire, slid 27% from £8.1m to £5.9m. Trading profits were down 22% to £6.8m as margins were squeezed by price cuts.
Chairman Edwin Booth said the economic conditions had made the trading environment “difficult” for Booths and many other businesses.
He explained:”An increasing number of consumers have exercised restraint in their buying habits which has spawned even more intense degree of competition throughout the grocery industry.”
As well as having to offer its customers more discounts, some 24% of all goods sold were those on promotion, Booths’ operating profits were also dented by increased business rates and a £1m refinancing cost with Lloyds Bank, which brought £37m of additional borrowing facilities.
Mr Booth, chairman of the Lancashire Local Enterprise Partnership, said the board was focused on driving increased efficiency through the business and was clearly focused on the core business. To this end its small online wine merchants business, everywine.co.uk.
“We are getting our heads down to developing an increasingly efficient Booths and one which will remain attractive to customers who seek out great food and drink at a reasonable price.”
