Following today’s release of B&M’s figures for the 52 weeks ending 25th March 2023; Sophie Mitchell, retail analyst at GlobalData, a leading data and analytics company, offers her view: “B&M’s popularity amongst consumers as a value retailer in the cost-of-living crisis did not translate into profit in its FY2022/23 results due to the tough economic conditions on the supply side. Despite group revenue increasing by 6.6%, driven by B&M UK like-for-like (l-f-l) customer transaction numbers increasing every month since June, group adjusted profit before tax declined by 12.6% to £436m. Although consumers have flocked to the value retailer throughout the cost-of-living crisis in search of its low-priced items, the retailer has been unable to overcome the other effects of inflation with rising costs and material prices offsetting this growth in sales.
“The retailer experienced revenue growth against weak FY2021/22 comparatives, but it has yet to resuscitate the strong levels of growth it sustained throughout the pandemic. B&M has built on its pandemic success by continuing to broaden its appeal amongst consumers, with GlobalData having found that 7.3% of consumers were trading down to the retailer for their homewares shopping in May. Additionally, the retailer has continued to increase its store numbers, opening a net of 21 stores in the UK FY2022/23 – with B&M’s UK l-f-l sales rising by 0.7% versus total growth of 4.0%.
“Although remaining a small part of the Group’s business, B&M’s French fascia continues to shine bright, with sales increasing 22.1% and adjusted EBITDA rising to £41m (FY22: £32m), demonstrating the success of its expansion strategy in both stores and product ranges, as it aligns its proposition to that of B&M in the UK. The grocery department has done particularly well in France as B&M has consolidated partnerships with L’Oréal, Nestlé and Mars, reconciling its UK proposition with French consumers. Heron Foods also witnessed double-digit sales growth of 18.1%, highlighting the attraction of the retailer’s offer of high-quality groceries at low prices throughout the cost-of-living crisis.
“FY2023/24 looks bright for the retailer, with UK l-f-l sales increasing by 8.3% in the first nine weeks of the financial year. The broad customer support base the retailer has built throughout the pandemic and the cost-of-living crisis, combined with falling product costs as inflation declines, bodes well for the retailer as it continues to expand both in the UK and France.”
