Discount retailer B&M faced its second profit warning within three months due to the necessity of reducing prices to clear excess inventory. The company initiated a “Back to Basics” strategy in October to enhance pricing competitiveness and streamlined its product offerings across various categories to simplify operations and cut expenses.
The latest financial update revealed a 0.6% decline in same-store sales for the crucial three-month period ending on December 27, which included the holiday season. B&M adjusted its full-year profit projection to be between £440 million and £475 million, down from the prior estimate of £470 million to £520 million, representing a significant decrease compared to the £620 million achieved in the previous fiscal year. Additionally, an accounting error in October led to a £7 million oversight in overseas freight costs.
Tjeerd Jegen, the newly appointed CEO, emphasized the ongoing initiatives to liquidate discontinued items as part of the long-term strengthening of B&M, acknowledging the short-term impact on financial performance. Meanwhile, Waterstones managed to counterbalance rising labor costs by posting a slight increase in annual profits, reaching £49.7 million compared to £45.6 million in the previous year, with a turnover rise from £528.3 million to £565.6 million.
HMRC is expected to implement a new points-based system to replace automatic fines for late self-assessment tax returns, aiming to revamp the tax system. Meanwhile, the launch of the new bank “This Bank” offers competitive savings products with an easy-access account yielding 3.82%, surpassing the industry average. Additionally, the acquisition of Black Sheep Brewery by the Paramount Retail Group saved 145 jobs in a £4.5 million deal, leading to the creation of the Great British Drinks Company.
In another development, Wetherspoons’ founder highlighted the ongoing challenge of tax discrepancies between pubs and supermarkets, as the government prepares to unveil relief measures for pubs worth approximately £300 million to aid in the post-pandemic recovery.