(Reuters) -Discount retailer B&M warned on Tuesday of lower annual profit amid weak British sales and unveiled a turnaround plan under CEO Tjeerd Jegen that aims to cut prices and draw customers back into stores.
Shares in the London-listed company fell as much as 21% in early trade to stand at their lowest since March 2020.
British retailers are navigating fragile consumer demand, rising wage costs from April’s national minimum wage increase, and fiercer competition in an increasingly promotional market.
B&M, which runs 786 B&M stores in Britain and 344 under the Heron Foods and B&M Express brands, said like-for-like sales at its British stores were weaker than expected, with a second-quarter fall of 1.1% reflecting weakness in fast moving consumer goods.
Jegen, who became CEO in June and led a comprehensive review of the business, said B&M had identified problems such as inconsistent pricing of key items, poor shelf availability of popular products, and overly complex product ranges that confused customers.
His ‘Back to B&M Basics’ plan aims to returning the UK business to sustainable like-for-like growth by cutting prices on key consumer goods, simplifying product ranges, and improving stock availability on shelves.
“We have more work to do, but we are confident these changes will restore consistent like-for-like sales growth over time,” Jegen said.
B&M said it expected the full impact of its turnaround efforts to take 12 to 18 months.
An early summer and the timing of Easter had boosted its sales of outdoor goods in the first quarter but those trends reversed in May. It forecast a plunge of 28% in first-half core earnings to 198 million pounds ($266.31 million).
B&M expects core profit of between 510 million pounds and 560 million pounds ($665 million and $730 million) for the year ending March 2026, down from 620 million reported a year earlier.
The retailer’s France business posted like-for-like sales growth of 5.2% in the half-year.
($1=0.7435 pounds)
(Reporting by Shashwat Awasthi and Yadarisa Shabong in Bengaluru; Editing by Harikrishnan Nair and Clarence Fernandez)
