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B&M upgrades guidance but its purple patch could soon end

by LLB Editor
4th Mar 21 11:33 am

Value retailer B&M continues to deliver the goods by upgrading its earnings guidance once again. It has likely benefited from being one of the few shops still allowed to open during the latest lockdown, so it has attracted customers who may have traditionally gone elsewhere for their shopping or simply like the in-store experience.

“It’s been in a sweet spot for the past 12 months and this purple patch looks like it will come to end from mid-April when non-essential shops are permitted to open again. B&M therefore only has a matter of weeks left to convince its newly acquired customers they should continue visiting its shops and not return to old habits.

“A lot of people think the pandemic will have changed shopping habits permanently and that people will view shops that were able to serve them through difficult times in a positive light. B&M’s management team will certainly hope that it is true, but they are also realistic that the business is about to lap an extremely strong year for sales, so the comparative figures will be very hard to beat.

“Fortunately B&M is very competitive on price and despite the OBR forecasting the UK economic recovery will be stronger than previously expected, there are still a lot of people out of work or worried about the security of their jobs that price really matters when they’re doing their shopping.

“We face a divided nation where those who remained in work throughout the pandemic could have extra spare cash to fuel a big spending spree versus those are even worse off and it’s the latter group that may well make B&M one of their retailers of choice.”

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