Reporting a very positive performance for the first half of the year, variety discounter B&M Bargain's CEO Simon Arora says "customers need a bargain more than ever".
7.5% like-for-like sales: up on last year
Group revenues grew 21.7% to £1.35bn, while like-for-like performance was particularly strong at 7.5% year on year. This compares to like-for-likes of 5.4% in the same period last year. Key drivers of success include:
- Growing transaction values
- More customers
- Improved in-store execution and availability
- Some price inflation
- Continued strong performance of grocery & FMCG ranges
In the period, B&M opened 15 net new stores, with openings for the full year on target, at 43 plus 7 relocations. The focus will be on new build stores, enabling the right store size and location. In Germany, B&M opened 7 new Jawoll stores. Though new store openings continue at a pace, B&M highlighted it is not experiencing any material cannibalisation of sales.
Grocery & FMCG will continue to play an increased role
By increasing the prominence of grocery and FMCG products within its mix, B&M is becoming more vulnerable to cost pressures within the industry. Conscious of maintaining a price gap with the supermarkets, the variety discounter is absorbing some of these rising costs, reflected in tighter margins in its UK business.
As B&M seeks to explore synergies between its own stores and the newly acquired Heron Foods stores, in January 2018, there are plans to trial fresh and frozen products in a number of locations. Best selling B&M lines will also become available in larger Heron stores.
Management movers & shakers
Alongside its interim results, B&M also announced that after five years in the role, chairman Sir Terry Leahy will step down in March 2018.
He will be replaced by Peter Bamford, who brings extensive experience from retail including Tesco, Kingfisher, WH Smith, as well as with consumer companies, with roles including chief marketing office, chief executive in the UK, and also chief executive of EMEA at Vodafone.
In Germany, B&M has appointed a new CEO, Christian Mueller. Prior to his appointment, Mueller managed retailer Action's operations in the German market. He will join the business in December 2017.