Opinion: B&M has earned its place in battle of the discounters

Group sales at the half-year point leapt almost 26% to £930.3m and adjusted pre-tax profit reached £66.4m, up more than 25% as an aggressive store expansion programme continues to deliver results – 47 stores were added to the portfolio in the period.

There are plans to open 80 outlets in the full year and B&M is now about half way to its ambitious target of at least 850 stores.

There were concerns that the challenging food market was impacting its like-for-likes, although many of its mainstream grocery rivals would settle for growth of 1.2% right now. And the retailer admitted that a record rate of store openings was creating operational challenges with an impact on overheads and in-store availability.

But these seem like short-term hurdles on the way to B&M realising its goal of transforming from regional roots to being a truly national giant.

Point of difference

Consumers still show no sign of turning their backs on the discount sector and B&M is well-placed among a competitive field, from Wilko to Home Bargains, to continue to benefit.

“Consumers still show no sign of turning their backs on the discount sector and B&M is well-placed among a competitive field”

Chris Brook-Carter

However, it will be its rivalry with Poundland that will define the sector. The two share many of the same qualities, not least the strength of their respective leaderships and strong infrastructures underpinned by pretty robust supply chains that act as significant barriers to entry for new competitors.

But what makes this head to head so fascinating is the differing models and propositions that each brings.

Poundland already has national scale and is blessed with a strong brand that in part comes from its single price offer. B&M by contrast still has some way to go before it can claim the same sort of brand equity or geographic coverage.

However, its multi-price offering allows it a degree of flexibility and a means to protect margins that Poundland cannot leverage to the same extent.

Meanwhile, Poundland has stepped into the world of ecommerce while B&M chief Simon Arora would argue of the folly of putting the worlds of online and the discount sector together.

These differences as much as the comparative strengths give this rivalry an added edge and will shape this sector for years to come.

Black Friday

From the news that Asda is to withdraw from Black Friday to statistics that the huge Sales weekend and Cyber Monday could deliver £2bn of spend as more than a third of UK consumers join the shopping frenzy, the next 10 days of retail will be the most unpredictable of the year.

To reflect the digital nature of the period and the importance of minute-by-minute intelligence of what’s going on, Retail Week will be suspending its print edition for the week and bringing the full force of its resources to bear on its digital channels.

From video and data to live reporting, Retail-week.com will be the hub of all that’s going on as this extraordinary week in British retail unfolds.