June 16, 2024

KT Business

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We don’t spend money on marketing, we create content

3 min read
B&M
Source: B&M

B&M does not spend money on marketing, according to CEO Alex Russo, with the retailer’s “aggressive” tactics aimed at taking market share firmly focused on pricing and the customer value proposition. 

Speaking during the group’s full year results call this morning (5 June), Russo told Marketing Week “the choice would be simple” if he had to choose between investing in pricing or a marketing campaign. 

“I would put it into pricing,” he said. “We are very aggressive on social media, which is free, but we don’t spend money on marketing. We create content.”

This includes using affiliates and influencers to “build momentum”, although Russo was not clear on whether this is paid-for content. 

B&M’s price-driven strategy appears to be paying off. According to its results for the year ending 30 March, group revenues rose by 10.1% to £5.5bn, with UK growth at 8.5%. The business notched up a pre-tax profit of £498m, an increase on £436m in 2023.

According to Russo, B&M is delivering “volume-led momentum”, with profits ahead of both pandemic and pre-pandemic benchmarks. Crediting the company’s “laser focus on low prices”, the B&M CEO claimed sustained volume growth is improving the retailer’s relationships with FMCG branded suppliers, reinforcing its position as the “fastest growing major customer for many.”

We are very aggressive on social media, which is free, but we don’t spend money on marketing. We create content.

Alex Russo, B&M

Like-for-like sales were also up 3.7%, compared with rival Poundland which reported a -2.8% sales decline for the same period. 

With both retailers having focused on store rollouts over the past year, retail analyst at GlobalData, Sophie Mitchell, says this indicates B&M is “winning over consumers with its prices and product range”, while the retailer’s like-for-like performance suggests its stores will remain successful after their ‘honeymoon’ period. 

B&M opened 47 new stores during the year period, including five relocations. The business expects to open 45 new stores UK wide over the next 12 months. The acquisition of 51 Wilko stores supplements the existing store rollout plan, with these shops representing key locations in the Midlands and the South.

The business has set a long-term goal to grow to 1,200 B&M UK stores, up on the previous 950 target. The company currently operates 741 stores nationwide.

Tesco CEO claims retailer ‘more competitive than ever’ on value

Re-enforcing the message that B&M’s core business proposition is not online, Russo told analysts he is “not interested” in retail media. 

“The higher a competitor dials up the narrative of retail media, I suspect what it is telling me is that they are actually suffering from volumes; their P&L structure is moving away from a shop,” he added. 

While Russo shows little interest in spending money on marketing, B&M made a notable announcement today in the promotion of Tiffany Hall to non-executive chair. Formerly group marketing director at Bupa and head of marketing at British Airways, Hall brings to the role an understanding of the power of marketing. 

Reacting to her promotion Hall, who has been on the B&M board since 2018, described the retailer as a “fantastic business with a laser focus on delivering value to customers” that is “well positioned” to deliver future growth.


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