Where should B&M target for its next stage of expansion?

ANALYSIS: Retail analysts at CACI have determined where discount chain B&M should open its next 50 shops as it presses on with its aggressive UK expansion. The retailer, which sells everything from household electricals to garden furniture, currently has 537 UK shops, most of which are in retail parks. It is looking to expand to 950 shops. Former Tesco boss Sir Terry Leahy, who now chairs the business, revealed in the group’s annual results last week that the chain had seen “robust “ trading momentum as its offer resonates with customers looking to save money during a period of uncertainty. B&M opened 53 sites in the year to 25 March, driving a 20% jump in revenue to £2.4bn. Pretax profits rose by 18.4% to £182.9m. Like-for-like sales also rose by 3.1% in the year. The majority of store openings have been in retail parks, which is now where 45% of its portfolio is located. Around 24% of its shops are in regional town centres. Dhiresh Bhardwa, principal retail consultant, location strategy and analytics at CACI, said: “B&M’s store locations are closely aligned to its target consumers. So far it has chosen locations where, according to our analysis, consumers are seeking good value for money as nearly half (47%) of all retailers that B&M are co-located with are other budget brands. B&M customers range from traditional middle-class families to financially stretched households on a fixed income, and because of this B&M needs its stores to be accessible to a variety of customers.” One of the challenges facing the retailer is competing with its own stores. Profiling the customers that shop in B&M locations using CACI’s Acorn consumer classification reveals that the existing estate captures “steady neighbourhoods” with traditional middle-class families, as well as “comfortable seniors” who are typically on a fixed income. Working on the basis that B&M will to continue to focus on retail parks with a budget or value retailer mix of at least 33% as well as target its ideal customer, the analysis suggests that the next 50 sites where the retailer would be the most successful are: ■ London – East Ham ■ London – Wood Green ■ Rotherham – Parkgate Shopping Park ■ Wigan – Robin Retail Park ■ Scarborough ■ London – Upton Park ■ Ayr ■ Burnley – Anchor Retail Park ■ Torquay ■ Newport – Newport Retail Park ■ Enfield – Great Cambridge Road ■ Lowestoft ■ London – Lewisham ■ Great Yarmouth ■ Yeovil ■ Irvine ■ Bridlington ■ Workington ■ Kilmarnock ■ Hartlepool – Anchor Retail Park ■ London – Stratford ■ Corby ■ Folkestone ■ Weymouth ■ London – Walworth Road ■ Barnsley – Cortonwood Retail Park ■ Bedford – Interchange Retail Park ■ Whitehaven ■ St Austell ■ London – Surrey Quays ■ Trowbridge ■ London – Tooting ■ London – Holloway ■ Hull – Kingswood Retail Park ■ Dover ■ Newark-on-Trent ■ London – Streatham ■ Stoke-on-Trent – Tunstall ■ London – Peckham ■ Doncaster – Wheatley Centre Retail Park ■ Dumfries ■ Andover ■ Barnstaple ■ Kettering – Northfield Avenue ■ Irvine – Riverway Retail Park ■ Plymouth – Honicknowle ■ Bebington – Croft Retail Park ■ Halifax – Pellon Lane ■ Peterborough – Boulevard Retail Park ■ Stevenage – Roaring Meg Retail Park To send feedback, e-mail amber.rolt@egi.co.uk or tweet @AmberRoltEG or @estatesgazette