B&M boosted by lockdown demand for DIY and gardening products

LONDON (Reuters) - British discount retailer B&M BMEM.L said on Friday exceptionally strong demand for do-it-yourself (DIY) and gardening products in the coronavirus lockdown drove a 22.7% jump in underlying UK sales over the last eight weeks.

The group, which has traded throughout the lockdown, said UK like-for-like sales growth had accelerated from 6.6% in the final quarter of its 2019-20 year, which benefited from a strong March performance in grocery.

It said customers had been coming to its stores much less frequently through the lockdown but their average spend had been much higher than normal.

The business was, however, experiencing higher than normal operating costs in distribution and stores due to the implementation of social distancing measures as well as higher wage costs during the crisis.

It also cautioned that it had seen a significant “bring-forward” of demand in some key categories, with the UK’s recent warm weather a major factor.

“We are not expecting this current level of trading to continue as normal shopping patterns resume,” said Chief Executive Simon Arora.

“Clearly, there is also considerable uncertainty in relation to both the progression of Covid-19 and the economic outlook and it is therefore hard to predict future trading levels,” he said.

Shares in B&M were trading up 4% in early deals at 385 pence, valuing the business at 3.85 billion pounds ($4.75 billion).

Reporting by James Davey, Editing by Paul Sandle