B&M has reported double-digit Q1 sales growth for the 13 weeks to 25 June 2016, however like-for-like sales have fallen flat.
Sales up 21.5% to £554.8m
Variety retailer B&M has revealed a strong Q1 performance with sales growing by 21.5% to £554.8m (UK: £508.1m and Germany: £46.7m). However, metrics are down on the previous year, reflecting challenging trading conditions. UK like-for-like sales have fallen to 0.0% from a positive 1.6% the previous year, yet underlying like-for-like sales that exclude stores within a three mile radius of a new stores have shown positive signs with growth at +1.7% (+2.4% in 2015).
UK performance affected by weather
B&M has cited unseasonal weather and the timing of Easter for the slow start to the year, however performance improved in May with more favourable conditions. While Q2 trading is said to be stable, current changeable weather conditions will have further impact in the second quarter, particularly on seasonal sales in categories such outdoor and garden.
With garden centres having significant dedicated space in larger format stores, this could have considerable impact on the year end performance, meaning B&M will have to drive the rest of the store harder. Being a variety discounter without fixed ranges, B&M and its suppliers have a key advantage flexibility to drive sales in other areas.
12 UK net new stores in Q1
Despite the impact on sales, B&M continues to drive forward with its store opening plans as it aims to reach its long-term target of 850 stores. By the end of the first quarter B&M opened 12 net new stores, taking the UK store count to 511. Another 38 stores are expected to open this year and we can expect a similar store target for the following year also. We recently went inside B&M's three formats; to view the store visit report, click here.
Jawoll: year end target of 75 stores
B&M's German business Jawoll grew 23.5% in the quarter to £46.7m. The retailer started the year with 56 stores, and having opened 5 new stores in the quarter, is on its way to reach the end of year target of 75 stores.
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|Priya Chandarana is a Retail Analyst at IGD, specialising in research on the growing UK discount channel. She brings food and wine retail and PR experience to IGD. To learn more about how IGD's research can benefit your business further, please get in touch - [email protected]|