B&M Slashes Prices to Combat Excess Inventory
B&M Stores is actively implementing significant price cuts to manage surplus inventory and encourage sales recovery. This strategy aligns with their “back to basics” initiative introduced last October, designed to sharpen competitive pricing while addressing ongoing financial challenges.
B&M’s Sales Performance and Discounts
Despite a slight decline in overall UK like-for-like sales, B&M reported a positive growth trend in December. However, sales fell by 0.6% in the critical quarter concluding on December 27. The firm anticipates a continued sales uplift into January.
Financial Outlook Adjustments
The company has revised its full-year earnings forecast downwards for the third time. B&M now expects underlying earnings between £440 million and £475 million, a decrease from the initial estimate of £470 million to £520 million. This marks a significant drop from the £620 million reported for the year ending March 29, 2025.
- Sales decline: 0.6% in the latest quarter
- Forecasted underlying earnings: £440 million – £475 million
- Previous earnings guidance: £470 million – £520 million
- Last year’s earnings: £620 million
Stock and Pricing Strategies
B&M’s management is actively addressing unwanted stock with substantial discounts. The firm is determined to recover like-for-like growth within the next 12 to 18 months. A noted underperformance by Heron Foods, where sales dipped by 0.1%, further complicates the situation.
In an effort to simplify operations and cut costs, B&M has narrowed its product range in various categories. The company asserted that ongoing investments in pricing, clearance initiatives, and enhancements in stock quality are essential for long-term growth.
Addressing Challenges and Moving Forward
A recent accounting issue, where B&M miscalculated £7 million in overseas freight costs, negatively impacted earnings guidance. The company has concluded its investigation into this matter and is implementing the suggested improvements for IT and financial operations.
Tjeerd Jegen, the newly appointed CEO, emphasized the importance of these initiatives. He stated the need to invest in clearing outdated inventory, acknowledging that while these investments are strategically sound, they affect immediate financial results. B&M remains committed to enhancing its market position through these actions.
