B&M slips into negative LFL

Date : 10 January 2019

The variety discounter reports double digit sales growth in the third quarter. However, UK like-for-like sales for the period were negative, against tough comparables last year.

New space driving sales at B&M

Group sales revenue grew 12.1% to £1.1bn in the 13 weeks to 29th December 2018 (at constant currency rates). This figure was boosted by £67.3m from the acquisition of French discount chain Babou in October. Year to date group revenue is up 14.4%, at £2.65bn.

In the UK, B&M sales grew 4.5% to £874.5m, driven by new space. B&M opened 20 new stores in the quarter. Like-for-like sales in the market declined -1.6% in the period, which the business attributed to tough comparables (+3.9% in Q3 last year) and difficult trading in November. This follows +1.6% like-for-likes in Q1, and flat like-for-likes reported at the midpoint of the year.

However, performance improved over the Christmas period. In December like-for-like sales grew +1.2%.

Heron Foods delivered good sales growth of 12.6% to £89.9m in the third quarter (like-for-likes were not shared).

Range tranformation ongoing in Europe

In Europe, Jawoll's performance was in line with H1 results, growing +5.5% to £55.3m on a Euro basis (+4.9% in British Sterling). The retailer continues to reshape the product range, reducing emphasis on clothing and driving growth through toys and electricals.

In Babou, focus is on clearing existing merchandise, with B&M-sourced ranges due to launch in March 2019.

Outlook

Store expansion plans on track: by year-end, the group will have added net 56 B&M, 20 Heron Food and 10 Jawoll stores.

December's positive trading momentum is showing signs of continuing into January. B&M's chief executive Simon Arora comments "B&M is on track to deliver a record year for both sales and earnings, representing our fourteenth consecutive year of profit growth.

Want to know more?

Retail Analysis subscribers can compare B&M's festive performance to UK competitors in our Christmas results tracker here