Jun 29, 2022
Retailers B&M and Moonpig play down UK consumer squeeze
Greetings card outlet Moonpig and discount chain B&M European Value have both maintained their profit guidance for 2022 despite predictions that rising living costs will squeeze discretionary incomes. Many retailers are bracing themselves for a potentially sharp contraction in spending later in the year as food and energy bills rise, citing forecasts that the UK will endure the highest inflation of any industrialised country. Moonpig shares fell 7.5 per cent in early trade to more than a third below their February 2021 initial public offering price of 350p. Sales in the year to the end of April were down 17 per cent to £304mn as expected following an extremely strong previous year, although pre-tax profit rose 21 per cent to £40mn. Citigroup analyst Ajay Nandal said the full-year numbers were slightly ahead of market consensus but added that he saw few short-term catalysts for any upgrades. B&M, a variety discounter that sells homeware, consumer goods and toys, said it also expected to retain customers won during the pandemic and maintained its prediction for full-year underlying profit of between £550mn and £600mn - almost 70 per cent greater than pre-pandemic levels. Group sales were down 2.2 per cent at constant exchange rates, while sales in the core UK market were down 9.1 per cent.
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