Budget retailer B&M European Value Retail revealed a further drop in sales from a year ago as business resumed amid COVID restrictions.
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He said the decline in sales had narrowed to 1.6% over the next eight weeks and the group maintained its full-year forecast of an underlying profit of 550 to 600 million pounds sterling.
B&M, which also has 311 Heron Foods stores and 109 stores in France, said overall group sales fell 2.2% to £1.2bn in the quarter at constant exchange rates.
This comes after the company’s annual results in May showed the group’s revenue fell 2.7% to £4.67bn on 26 March, while profits stood roughly at £525m.
Jefferies analysts said it is unclear how much B&M will benefit from shoppers switching to economy brands amid a cost of living crisis.
Jefferies’ James Grizzinick said: “A more than 30% increase in petrol prices in Europe, which will begin to be reflected in higher utility bills from October, and 12% of UK petrol prices in the past four weeks speak of another sharp contraction Consumer purchasing power.
“The support measures announced by the UK government will help mitigate the blow.
“But the extent to which profits from the food business can offset B&M’s very limited customer base is not so clear at this point.”
B&M said that compared to two years, which excludes unusually strong April 2021 business, UK same-store sales fell 4.4% less sharply and total group revenue rose 3.1% .
The figures follow its most recent annual report, which revealed that outgoing B&M boss Simon Arora was paid £5m last year, up from £3.7m a year earlier and a significantly higher salary than Tesco’s general manager .
While the group took advantage of the shutdown, allowing it to remain open as it was classified as an essential trader, it has since resumed trading.
Owners warn that the company’s outlook is uncertain and the impact of rising inflation on commodity prices and consumer spending is yet to be felt.
Arora said in May that tightening the belt could hurt sales, but it could also increase the number of new customers looking for lower-priced products.
Aurora is expected to be replaced by Chief Financial Officer Alex Russo, although a date has yet to be confirmed.
The billionaire, who grew rapidly in the network, announced in April that he would step down next year.
During his 17 years at B&M, which he bought with his brother Bobby in 2004, the entrepreneur has grown into a huge discounter on the FTSE 100, with 1,125 stores in the UK and France.
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