Belfast Telegraph

B&M boss targets London with plans to 'disrupt' the convenience food market

The chief executive of discount retailer B&M has signalled that the group's assault on the convenience food market could see it expand into London as he pledged to shake up the sector.

Fresh from B&M's takeover of grocery store operator Heron Food Group last week, Simon Arora told the Press Association that he sees the deal as an "opportunity to be a disruptor".

"B&M sees itself as a disruptor, we've gone from 10 shops in Lancashire to a £2.4 billion business with over 550 stores.

"We see the Heron deal as an opportunity to be a disruptor in the convenience store market.

"The major players don't compete on price, so there is a place for a value player, especially now."

Last week B&M, which is chaired by former Tesco boss Sir Terry Leahy and mainly sells general merchandise, splashed out £152 million to take over Heron's 251 stores, which are predominantly found in the North of England.

It plans to expand the business, initially through the addition of between 10 and 20 new stores per year, and Mr Arora said that they could even set up shop in London.

"Heron gives us the optionality to look at expanding into London in the convenience store market, in the longer term.

"We're on a journey to go national," he added.

Soaring inflation caused by the collapse of the Brexit-hit pound has pushed up the price of everyday items for hard-pressed shoppers and, i n these conditions, Mr Arora believes a "value" offering can thrive.

While the B&M boss will focus on the convenience store market only , the wider supermarket sector has become increasingly crowded in recent years, with the emergence of Aldi and Lidl piling pressure on the big four players - Tesco, Asda, Sainsbury's and Morrisons.

Iceland, the Co-Op and online-only supermarket Ocado also operate in the space.

To further complicate matters, the entrance of AmazonFresh into the market and the internet giant's plan to acquire Whole Foods makes for a sector constantly in flux.

But Mr Arora is unfazed: "They said that about B&M, that you can't gain market share, but look at us today."

The businessman and his brothers Bobby and Robin have built B&M up to a 550-plus store retail giant since taking control of the firm in 2004.

In May, the group booked full year pre-tax profits of £182.9 million, while revenue rocketed 19% to £2.4 billion.

Mr Arora also believes that the wave of consolidation in the retail sector - which has seen Sainsbury's take over Argos and Tesco attempt to merge with Booker - could represent an opportunity for his convenience store ambitions.

"The consolidation in the sector reaffirms our view that convenience is an attractive part of the market and is growing much faster than supermarkets.

"They also throw up opportunities, and we will look at them as and when they come up."

The Competition and Markets Authority has said that Tesco's proposed £3.7 billion merger with Booker could result in competition being harmed in more than 350 areas where there is an overlap between the duo's shops.

It could order a sell-off of hundreds of stores, with rival operators set to pounce.

For B&M, the plan is to open 40 to 50 new stores per year, with Mr Arora pledging to take the bargain chain beyond its northern heartlands.

"We have 550 B&M stores, want to get that to 950.

"Currently we have few and far between in London and the South, we are trying to correct that and half of our store openings this year will be below the Midlands."

Weekly Business Digest Newsletter

This week's business news headlines, directly to your inbox every Tuesday.