Storms take bite of Booths profits
Food and drink retailer Booths recorded resilient sales results against the backdrop of a tumultuous grocery market and the challenges of Storm Desmond.
Sales were down by only 0.7%, held back in part by continued food deflation in a highly charged retail market. Sales were further affected by the closure of two key stores following catastrophic flooding.
The forced closure of top performing Keswick store for six months, as a result of the storm flooding, reduced annual sales by 1.4%. Booths would have recorded a modest increase in sales of +0.7%, if it were not for the devastating effects of the flooding in the crucial Christmas trading period.
Underlying trading profits reduced from £3.1m to £2.6m as a result of the turbulent retail market and the costs associated with opening and supporting four new stores in one year. The decline in bottom line profitability was driven by several one off items, notably £1.6m of restructuring costs, £1.4m of refinancing costs and a £6.7m non-cash impairment charge.
Booths CEO, Chris Dee, said: “It remains a very challenging retail market, but as ever, when the going gets tough, Booths gets tougher. Booths has been a resilient business for 170 years, and very much remains so today.”
“Our teams have coped admirably in a year of enormous operational change, we’ve closed stores, opened modern new stores, we’ve restructured our management teams and the business came together to rise to the challenges of delivering 2015 Christmas in the face of some of the worst flooding on record.”
Projected 2016 Christmas sales offer brighter news for Booths. The launch in early October of their Great Northern Christmas Book, shows early signs of success with a 30% rise in Christmas pre orders.
versus figures this time last year.
Booths have ambitious targets to double the sales of own label Booth Brand products over the next 5 years and have a rolling calendar of New Produce Development planned for the next 18 months. Sales of recently revamped ranges of ready meals saw a 24% increase and sales of Booth branded cheese have risen by 42%, year on year, since a re-launch.
“We’re come out fighting on behalf of our customers. We’re investing in price and value, improving our ranges, delivering excellent customer service and upping the ante in our store environments. Selling top quality produce served by first class assistants was the aim of the our founder Edwin Booth; that 1847 formula still works for us in increasingly competitive markets.”