B&M's interim results for the 26 weeks to 26 September 2015 reveal strong results across all metrics, boosted by the discounter's bold UK expansion strategy.
LFL sales up 1.2%
Following a promising start to the year with sales up 22.8% in Q1, latest results show that B&M continues to trade strongly across its markets with H1 sales up 25.8% to £930.3m (+26.8% at a constant currency). Profit has also seen double-digit growth with adjusted profit before tax increasing by 25.4% to £66.4m. Positive like-for-like sales up 1.2% highlight B&M's winning in-store proposition that clearly continues to resonate with customers.
Our latest ShopperVista tracking shows that two in five shoppers have visited a variety discount store in the past month. Half of these shoppers are going in to buy brands cheaply and two thirds of shoppers would use these stores more if there was a bigger range of food and groceries available, creating strong opportunities within this channel.
On track to open 80 UK stores
B&M has made significant progress in its 2015/16 UK store opening plan. With 47 net new stores in H1, of which 20 were in the south, this leaves a total of 33 further store openings in H2 to reach the retailer's target of 80, taking its total store count to over 500. B&M's total store target in the UK is 850, and with under-representation in The Midlands and Southern England, we can expect the discounter's to extend its coverage by focusing new stores in these regions. Our ShopperVista Channel Focus data shows that almost half of main grocery shoppers say they would use a variety discounter more if there was one near to where they live or work.
While B&M expands rapidly in the UK, its pace in Germany is somewhat slower with two new Jawoll stores in H1 and three more planned before Christmas as it continues to trial the business with these new stores.
Stores supported by two new distribution centres
Another 50 UK openings are targeted for 2016/17 and B&M will support this continued expansion with two new distribution centres in Cheshire, both of which opened in September 2015. Located in Runcorn and Middlewich, the two warehouses have added over 800,000 sq ft of warehouse space, in addition to B&Ms three existing warehouses.
Positive LFL on grocery
Grocery/FMCG has been highlighted by B&M as a strong performing category with positive like-for-like sales, as the discounter maintains strong price competition across its predominately branded ranges. Innovations within grocery and across the store that have set B&M apart include American candy, home improvement and greeting cards, showing that this is a key way for B&M to differentiate itself. As Christmas approaches, we can expect to see further innovation from B&M to stay competitive within the variety discount channel and drive key seasonal sales.
ShopperVista Channel Focus: impulse purchasing in high street discount stores
Want to know more about the variety discount channel?
Hear from Poundland CEO Jim McCarthy and his senior team at IGD's Poundland Trade Briefing on 24th February 2016. For more information,click here.