B&M has reported an almost 50% plunge in annual profit, describing the past year as a "difficult year" for the discount retailer. The FTSE 250 company revealed a drop of more than 47% in group profit before tax to £227 million for the year ending 28 March, from revenue of £5.8 billion, down 3.6%.
Challenging Market Conditions
Tjeerd Jegen, chief executive of the discount homeware and grocery retailer, characterised it as "a difficult year that saw profits fall due to a challenging market and execution issues". He noted that the 700-store chain unveiled a turnaround strategy in October aimed at restoring like-for-like sales growth at B&M UK. The business also operates roughly 150 locations in France. Over the year, like-for-like sales declined by 0.1%.
Jegen added: "The past six months has seen us sharpen our pricing, improve on-shelf availability in best-selling brands and revamp our in-store promotions." Current deals include Visage Pour Homme aftershave at £3.99 and an eight-pack of Duracell AA batteries for £4.50, while a box of 200 Yorkshire Tea bags is priced at £5.79.
Cost Mitigation Plans
Jegen expressed confidence that B&M can offset rising energy costs in the year ahead through cost mitigation, the benefits of which will flow through to the bottom line once like-for-like sales return to growth. The Liverpool-based retailer, founded in Blackpool in 1978, employs approximately 35,000 staff and serves around 4 million shoppers each week. It held a position in the FTSE 100 before being relegated in 2024 following a four-year stint.
Broader Retail Sector Pressures
Competition across the retail sector has been fierce as financially stretched consumers have reined in discretionary spending amid successive waves of inflation, driven by soaring energy costs and rising prices triggered by Russia's invasion of Ukraine in 2024. The war in Iran waged by the US and Israel this year has fuelled the latest surge in global oil prices, which looks set to have a comparable knock-on effect.
New research published this week from Vanquis, the banking firm specialising in providing credit to consumers who may struggle to obtain it elsewhere, has caught the attention of industry observers. Nearly a third of respondents to its Financial Wellbeing Index are relying on credit to meet everyday expenses. The research also found that energy bills have surged by 17% over two years. The study identified groceries as one of the most frequent triggers for using up savings, cited by 25% of respondents, followed by car repairs at 19% and utility bills at 17%.
Online Retailers' Updates
Wednesday also shed light on the mounting challenges facing conventional retailers as purely digital rivals continue to gain ground. Huddled, the London-listed company behind the Peeko website, reported revenue of £4.2 million in the first quarter of 2026, down slightly from £4.4 million during the same period the previous year, reflecting a "strategic decision to moderate volume while structural issues were addressed." The site processed 86,000 orders between January and April, with an average order value of £37 and a product margin per order of £17.
Huddled positions Peeko as "an online Costco", currently stocking Comfort Professional Sensitive Classic Fabric Cleaner in 4.8 litre packs for £6.99, alongside boxes of 24 Mars Bars for £12.99. Martin Higginson, Huddled's chief executive, said: "We have a great value proposition, next-day delivery, genuine customer loyalty, and the margins to justify scaling. The hard part is done. What comes next is the exciting part."
Debenhams Revival
The owner of the Debenhams brand also released an update that echoed these recent trends. Once a well-established fixture on the British high street, Debenhams boasts a heritage stretching back to 1778. The business adopted the Debenhams name in 1813 when William Debenham invested in what had previously traded as Flint & Clark. By the 2020s, however, the retailer was in serious difficulty. Boohoo snapped up the brand for £55 million in January 2021 in a deal that excluded the physical stores and their workforce. At that point, 118 department stores remained in operation, all of which had shut their doors by the end of May that year.
Today, Debenhams is positioned by its Manchester-based parent company as "Britain's online department store". Boohoo reported that during the first quarter to the end of May, "momentum in the Debenhams Group multi-year turnaround accelerated". Gross Merchandise Value climbed by 0.5% year-on-year, with trading in May described as "particularly strong". Boohoo also operates its own-name website alongside the PrettyLittleThing brand. Gross margins in the first quarter to May reached 53.5%, up from 52.1% the previous year. Returns dropped by approximately 5%, while exceptional costs were slashed by 72% and capital expenditure reduced by 54% year-on-year.
Chief executive Dan Finley said: "Debenhams Group has returned to growth, and Q1 marks the inflection point we have been working towards. This is the result of the heavy lifting of our multi-year turnaround: the move to an asset light marketplace model, the warehouse consolidation, the cost reset, and the rebuild of every brand on a single proprietary platform."
Market Reaction
The contrasting fortunes among London-listed retailers lay bare the pressures facing an industry that contributes around £490 billion in annual sales to the UK economy in 2025 and stands as the largest private sector employer, accounting for roughly 3 million jobs. City investors will be keeping a close eye on developments, eager to distinguish the sector's winners from its losers as this vast industry continues to evolve.
Wednesday's announcements were warmly received by the markets. B&M's shares surged 17% to 199p, Huddled climbed 7% to 0.78p, and Boohoo rose more than 11% to 21p. Peel Hunt analyst Jonathan Pritchard, assessing B&M's results, noted they "were a beat versus our and consensus expectations" with earnings around "2% clear of hopes". He continued: "There are a lot of things going on at B&M, and some of the 'back to basics' plans are clearly having an impact."
