Discount retailer B&M has issued its second profit warning in the past three months, citing the need to reduce prices to clear excess stock. The company, which has seen its share price drop by half since May last year, initiated a “Back to Basics” strategy in October to streamline prices and simplify its product range across various categories.
In a recent trading update, B&M reported a 0.6% decline in like-for-like sales in the UK for the crucial three-month period ending December 27, which includes the Christmas season. The company revised its full-year profit forecast to a range of £440 million to £475 million, down from the previous guidance of £470 million to £520 million. This adjustment reflects a substantial decrease from the £620 million profit recorded in the previous financial year ending March 29.
Apart from market pressures, B&M faced challenges last October due to an accounting error that resulted in an additional £7 million in overseas freight costs going unaccounted for. Tjeerd Jegen, the newly appointed CEO, emphasized the company’s commitment to investing in clearing discontinued product lines and adjusting pricing strategies for long-term growth, despite the short-term impact on financial performance.
In other news, Waterstones reported a slight increase in annual profits, attributing this success to effective cost management strategies amid rising labor-related expenses. The retailer, with 316 stores and a recent expansion adding seven more outlets, saw profits rise to £49.7 million from £45.6 million in the previous year, with turnover increasing from £528.3 million to £565.6 million. Notably, the company’s focus on margin improvement and cost control helped offset the impact of higher payroll costs due to national living wage increases.
Looking ahead, experts predict that HMRC’s annual tax revenue could exceed £1 trillion for the first time, driven by factors such as increased National Insurance Contributions and fiscal adjustments related to wage inflation. As the tax deadline approaches, individuals rush to file self-assessment returns, contributing to the expected rise in tax receipts for the government.
In the retail sector, McDonald’s faced backlash as customers expressed outrage over the price of a hash brown reaching nearly £2 in some locations. The company clarified that franchisees set prices independently, emphasizing their commitment to providing quality dining experiences at reasonable prices.
Additionally, a new UK bank, now rebranded as This Bank, has launched with competitive savings products, including an easy-access account offering 3.82% interest. The bank also offers fixed-term savings accounts with attractive rates to attract customers seeking higher returns on their deposits.
Finally, Wetherspoons’ founder voiced concerns over the tax disparity between pubs and supermarkets, highlighting the ongoing challenges faced by the hospitality sector. As the government prepares to unveil relief measures for pubs, industry leaders stress the need for support to address competitive pressures from retail giants.
The Black Sheep Brewery has been acquired in a £4.5 million deal, securing 145 jobs and paving the way for a new venture under the Great British Drinks Company. The acquisition aims to preserve the distinctiveness of each brewery’s brands while driving future growth and investment in the brewing industry.