B&M chief defends slowdown in like-for-like sales growth

The FTSE 250 retailer, whose chairman is former Tesco boss Terry Leahy, today reported a 0.3% rise in full-year like-for-likes, compared to a 4.4% increase last year.

Verdict analyst Andrew Stevens called the figure a “concern”.

However, speaking to Retail Week, B&M’s chief executive Simon Arora dismissed the worries and pointed to the fact it had opened a “record” 79 stores, compared to around 40 or 50 in previous years.

“If you open a second store in a town, you can’t help the fact that a modest proportion of [the original store’s] sales will divert to the new store,” he said.

“It’s inevitable the impact of cannibalisation will be more material.”

Arora said this was “perfectly acceptable if, as a company, you grow your earnings so healthily”.

B&M reported that annual pre-tax earnings jumped 19.5% to £161.4m, while total sales increased 23.6% to £2.04bn.

Arora also flagged that on an underlying basis B&M’s like-for-likes rose 2.4%, which he said contrasts favourably to other “successful” retailers reporting flat comparable sales.

On new UK store openings, B&M will continue to focus on the southeast and south coast where it remains “under-represented”, Arora said. The group, which currently has 12 stores inside the M25, is aiming for a total UK estate of 850.

It expects to take on 4,000 new staff over the next two years as it continues its expansion.