Interim results (26 weeks to 26 September) for the value retailer B&M show that the business retained significant momentum in its second quarter, despite the slackening of lockdown restrictions bringing more ‘normal’ trading conditions to the UK market during the summer. Total revenue for the half was £2,242m, with the uplift driven substantially by like-for-like increases as shoppers maintained behaviour focused on shopping less frequently but in notably larger baskets.
Core B&M UK operation the strongest performer
Still representing 84% of the total group B&M UK performed ahead of the company average, with total sales up 29.5%, underpinned by a like-for-like uplift of 23.0%. Performance in the second quarter moderated from that in Q1, but nevertheless with like-for-likes up 19.1% growth was still exceptional. Further moderation in performance is expected in H2, but to date Q3 performance is reported to be similar to H1. While the fascia’s town centre stores have been performing less strongly, the 80% of its 657 stores in out-of-town locations have been out-performing in contrast.
Heron Foods sales up 14.8%
B&M’s discount convenience subsidiary, Heron Foods (acquired in 2017) also grew strongly over the six months, with sales reaching £216m and now trading from 299 stores across the north of England. Meanwhile, B&M’s French subsidiary, Babou saw sales fall slightly (2.4%) owing to the impacts of lockdown restrictions in that market, where half its stores had to close. The French business is now trading from 103 stores, of which 37 are under the B&M fascia.
Outlook upbeat for H2 and 2021/22
As well as seeing continuing elevated like-for-like performance in Q3, B&M also sees significant growth opportunities for the next 18 months. While some new stores have been added during the course of H1, B&M’s programme opening has been slowed by delays to development, and now notably more new locations are likely to come on stream in H2 than originally planned. With a net increase of over 30 new B&M stores projected before year end, this will provide a significant incremental boost as the company enters its 2021/22 financial year.