B&M’s chief executive Simon Arora says that the golden quarter would be challenging for retailers that had not nailed their ‘in-store experience, pricing or product.’
The value retailer’s boss says that today’s shoppers “are more mindful of price than ever before” due to the pressures price inflation and high levels of consumer debt had put on disposable income.
Arora, who spoke to Retail Week as B&M unveiled a 17.8% jump in interim pre-tax profits, says that the current “economic climate is very supportive of discount retailers,” which would mean other retailers could face an uphill climb this Christmas.
“The market will be tough and it will be unforgiving for those that might drop the ball in one aspect of their proposition, be it in-store experience, pricing or product,” he says.
While Arora says the golden quarter was important for B&M, the retailer was less reliant upon it to drive up sales than others.
“B&M has the proud boast that we make profits 12 months of the year, we do not have a loss-making quarter or even month,” he says.
The retailer currently has 552 B&M stores in the UK and aims to grow that number to 950, with a particular focus on expanding into the Southeast.
To this end the retailer has acquired a plot of land in Bedford to build a 1 million sq ft distribution centre specifically for the South.
The value retailer is also ramping up its German arm and plans to increase the number of Jawoll stores it operates there.
“We want to bring [Jawoll] closer to the B&M model so we are going increase the rate of openings,” says Arora.
“One of the limiting factors is that Jawoll only has 80 stores currently, to execute the B&M strategy, we need scale.”
Arora also plans to ramp up the store footprint for Heron Foods, which it snapped up for £152m in August – but it will not be targetting primary locations.
“Convenience retailing is a good place to position yourself; the British shopper prefers to buy little and often and is shying away from the weekly shop in a hypermarket. There is space for a discount proposition within convenience and Heron is right exactly there,” says Arora.
“It has shied away from high rent locations, it’s sweet spot is in neighbourhood shopping where it is a community store. We want to open more of the same but at the moment it is limited to the North and Northeast, so we’d like to take it more national.”
No comments yet