Variety and discount retailer B&M today (5) stated that its Christmas comparable sales rose 6.4 per cent, showing that shoppers sought out value options as they grappled with the cost-of-living crisis.
B&M said strong demand for non-grocery products helped lift margins as it posted a 12 per cent jump in quarterly revenue to 1.56 billion pounds.
For the year to the end of March it said it expected annual core earnings of between 560 million pounds to 580 million pounds, higher than the current analyst consensus forecast of 557 million pounds.
In recessionary times, discount operators tend to do relatively better than mainstream peers as they have lower cost bases and shoppers become more price sensitive.
"Despite the challenging macroeconomic environment, we will continue to work hard to help both existing and new customers manage the cost-of-living crisis," B&M chief executive Alex Russo said in a statement.
Commenting on the figures, Tash Tesseyman, retail analyst at GlobalData, stated that B&M has performed well this festive period, aided in part by store expansion and trading down buying behaviour.
“Against a weak comparative, B&M’s UK arm bounced back this quarter as revenue reached £1,302m, up 10.3 per cent on Q3 FY2021-22. This was aided in part by store expansion, as 12 new UK stores have been opened since Q3 last year. However, B&M’s like-for-like sales in the UK were also robust during this period, up 6.4 per cent in Q3 FY2022-23, as the discounter benefited from consumers trading down in the lead-up to Christmas."
Despite UK total retail volumes expected to decline 6.2 per cent in 2023, according to GlobalData, discounters will likely come out on top as low-price points entice consumers to switch away from supermarket chains for food and groceries, said the analyst.
“Going into the Christmas period this year, B&M was able to keep its stock in line with demand as its supply chain performed well this quarter. Stock availability will be key for the discounter in 2023 to ensure consumers do not switch away to rivals such as Home Bargains and The Range, as shoppers search for low prices due to continued inflationary pressures.”
