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B&M has a tough act to follow

by LLB Editor
3rd Jun 21 11:36 am

Value chain B&M was one of those rare retail names which did well during the pandemic and as a result its sales trajectory is a mirror image of most other retailers which are seeing sharp increases in revenue as restrictions are eased.

Having received the prized ‘essential retailer’ status thanks to its groceries offering, the company was able to trade at a time when most rivals, other than the supermarkets, were shuttered.

This inevitably allowed the B&M to snaffle market share and set a very hard act to follow for 2021. There was also a stockpiling effect in the early stages of Covid-19 which further inflated sales.

“While some level of drop off is only to be expected, shareholders will be crossing their fingers that the business can hold on to at least a decent chunk of the new customers it won in 2020,” says AJ Bell financial analyst Danni Hewson.

“This means it needs to get the basics of retail absolutely spot on, ensuring stores remain attractive, clean and safe destinations with the products they want at attractive price points.

“One benefit the company enjoys is that a lot of its sites are in retail parks with ample parking, which might suit consumers nervous of public transport and more reluctant to frequent a busy high street as we emerge from Covid.

“The company is continuing with an ambitious rollout of new stores and it sounds like it will remain on the lookout for any opportunities that arise as peers who were harder hit in the last 12 months exit the market.”

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