B&M European Value Retail said like-for-like sales dropped 9.1 per cent across its 705 UK stores in the quarter to June 25 – falling 19.1 per cent in the first five weeks as it came up against tough comparatives from a year ago.
It said the sales declines pared back to 1.6 per cent in the following eight weeks and the group stuck by its full-year forecasts for underlying earnings of between £550m and £600m.
B&M, which also owns 311 Heron Foods shops and has 109 French stores, said total group sales fell 2.2 per cent to £1.2bn in the quarter on a constant currency basis.
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It comes after the firm’s annual results in May showing group revenues declined by 2.7 per cent to £4.67bn in the year to March 26, while profits stayed roughly flat at £525m.
The business was founded by Malcolm Billington as Billington & Mayman and the first store opened in Cleveleys, in 1978.
Analysts at Jefferies said it was unclear how much B&M would benefit from the shopper switch to budget brands amid the cost-of-living crisis.
James Grzinic at Jefferies said: “The more than 30 per cent spike in European gas prices, which will start feeding through from October into augmented utilities bills, and the 12 per cent jump in UK petrol prices of the past four weeks talks to another major squeeze in consumers’ ability to spend.
“The support measures announced by the UK Government will help dampen the blow.
“But the extent to which food trading down gains can offset a very constrained core B&M customer base is not that clear at this stage.”