1. Comment
November 12, 2020

B&M is a clear winner during Covid-19

By GlobalData Retail

Lockdown in the UK provided a suitable environment for B&M to thrive. Group adjusted EBITDA rose 95.3% to £295.6m, exceeding expectations of £285m set out at the end of September, supported by rising average transaction values. As a result, the group has repaid the £3.7m it received under the UK Government’s Job Retention Scheme during the first lockdown.

B&M’s value proposition appeals amid economic uncertainty, while its large out-of-town stores (the vast majority of which remained open throughout lockdown) allow shoppers and staff to adhere to social-distancing guidelines. The value general merchandiser’s wide range across various product categories also served it well, and it was able to capitalise on strong demand for tinned and packaged food, as well as DIY & gardening products as consumers stayed home.

B&M achieved double-digit revenue growth for the six months to the end of September – UK sales rose 29.5% to £1,885.4m and like-for-like sales increased 23.0%. Strong UK like-for-like growth of 26.9% in Q1 slowed slightly in Q2 to 19.1% as non-essential retailers, such as home specialists, reopened stores. The outlook for H2 is positive, with B&M’s UK stores remaining open during the second lockdown and like-for-like sales growth remaining at a similar level to H1 so far in Q3. This performance is particularly impressive given that B&M does not operate a transactional website. Heron Foods and Babou also achieved positive like-for-like sales growth during the six-month period.

Store openings at B&M have slowed considerably. It opened nine new stores in the UK during the six-month period, but closed eight smaller and older stores. Store openings will pick up over the next six months, with plans to open between 30 and 35 net new stores during FY2020/21, despite the ongoing impact of Covid-19 on physical retail.

Free Whitepaper

What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.