Discount retail chain B&M Bargains has launched a “back to basics” transformation plan after a “weak” operational performance hit its half-year results and sent shares falling this morning.
Liverpool-based B&M European Value Retail says profits for H1 2026 will be down on last year. It’s expecting adjusted EBITDA of £198m for the first half, down from £274m last year.
The group blamed weak “operational execution”, as well as falling margins. It also expects a £30m impact from the rise in the national minimum wage and employer national insurance.
And it now expects group adjusted EBITDA in the range of £510m-£560m for the full year.
As a result, it has launched the Back to B&M Basics plan to boost its performance by making stores more exciting and offering more deals to its customers. The group said “We are taking decisive actions to correct the operational weaknesses identified”, and added the plan could take 12-18 months to take full effect.
But the trading update hit shares this morning, with shares falling as much as 17% in early trading, meaning hundreds of millions of pounds were wiped from its value.
For the 26 weeks to September 27, the group saw revenue rise 4% to £2.75bn thanks to growth in the Ƶ and France and the opening of 46 stores. In the Ƶ, B&M’s like-for-like sales grew just 0.1% in the first half, with some success in the first quarter followed by a like-for-like decline of 1.1% in the second quarter that was below group expectations.
The Back to B&M Basics plans include:
- Cutting prices on 35% of its key items, by an average of 1.8%, which the group says “will help drive our price perception with customers over time, and other pricing adjustments have helped limit the impact on our margins”.
- Relaunching Managers’ Specials to bring “excitement and great value” back to stores after the existing ranges became “too static and duplicative”. Managers will be able to adjust the discounts to meet local needs, though B&M says its Back to School and Halloween ranges have already been trading well.
- Changing its product range to reduce the number of items sold and to speed up the sale of discontinued products.
- Focusing on making sure “our most popular products are always available to our customers”, as B&M’s performance in meeting on-shelf availability targets has fallen below industry benchmarks. The firm said: “We found that our emphasis on store presentation prioritised the look of a full shelf over actual stock availability of products customers want.”
CEO Tjeerd Jegen said: “Since becoming CEO in June, I have led the business through a comprehensive review of our customer proposition and operations. We have concluded that while B&M's value proposition remains strong, our operational execution has been weak. This has impacted our first-half trading performance, and this is reflected in the full-year outlook that we publish today.
“Our response is a decisive plan, 'Back to B&M Basics', focused on returning the Ƶ business to sustainable like-for-like growth. This is our absolute priority. We have already sharpened our price position, and we are moving with pace to refocus our ranges, improve on-shelf availability and bring back excitement to our stores. We have more work to do, but we are confident these changes will restore consistent like-for-like sales growth over time."
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