We look at the latest developments from variety discount retailer B&M including its new banner 'B&M Express', meal deal offer and Q3 performance.
New banner rollout and store openings
The retailer continues to rollout its new banner 'B&M Express'. It began by converting an initial seven stores in September 2018. In total 22 now trade under the banner. The stores are across the country including branches in Manchester, Coventry and Luton. The retailer has not announced plans of how many more stores will be converted saying it is too soon to judge its success. However we expect continued development in this area.
Plans are to open 56 B&M stores and 20 Heron Foods by the end of 2019.
Growth in frozen
Heron Foods continued to trade strongly throughout Q3 with overall revenues growing by 12.6% to £89.9m in Q3. Nine new stores were opened in this period. Since the acquisition of Heron Foods in 2017 the retailer has been introducing chilled and frozen food to more of its stores, with the aim of rolling it out to 300 branches nationwide in the future. Prices across the mainly branded range are competitive, with the most expensive item at £3. The retailer stocks a variety of frozen goods including ready meals and a vegetarian offering.
You can find out more about the new frozen range in our Bristol store visit report.
Delivering value with new meal deal
In October 2018 B&M launched a new meal deal. Shoppers can buy a sandwich, packet of crisps and drink for £1.75. The deal is almost half the price of leading retailers and offers a point of differentiation from other discounters.
The B&M Group's overall performance has been strong, however it has slowed from previous years. Overall Group sales revenue for Q3 (between 30 September 2018 to 29 December 2018) were +12.1% to £1,087m. This was compared to +22.7% in Q3 of 2017. This brought the year-to-date revenue to +14.4% £2,650m compared to +21.7% in 2017.
B&M UK like-for-like revenue in Q3 was -1.6% at £874m compared to +3.9% in 2017. This brought the year-to-date to -0.7% at £2,151m compared to +6.0% in 2017. During this period 20 new stores were opened.
November was the most challenging month for the retailer, but performance improved again in December with like-for-like sales rising to +1.2%. This positive trading has continued into January. The retailer expects a good Q4 with an improved margin as there is less end of season stock going into the January sale.
The chief executive, Simon Arora has said this year will represent a fourteenth consecutive year of profit growth. He has expressed his confidence in the business saying;
"The business’ ability to manage profitability through uncertain trading conditions is testament to the resilience of the business model and the strong operational controls we have in place. We continue to open new stores and win market share when other retailers are retrenching."
Sign-up here to receive our free newsletter that will keep you up-to-date about the latest news and developments from B&M.