Booths has reported a further slide in annual sales and trading, but stressed improved performance in the latter part of the period after a “year of two halves”.
Sales fell a further 2% to £258m in the year to 31 March 2018 on top of a 4.3% sales slump in 2016/17 amid what the accounts dubbed a market “fraught with disruption”.
Gross margins also came under pressure from a decision to invest in price, plus employment cost increases, meaning trading losses grew from £1.2m to £2.2m in the period.
However, stripping out a 2016/17 one-off rental income gain, the trading loss was in line with last year and its headline pre-tax loss more than halved to £5.5m from £13.5m as a £1.6m profit on property disposals and a reversal of the prior year’s £17m property impairment cut losses.
Booths COO Nigel Murray acknowledged the first half of the year represented a “poor performance”, after a continuation of the “difficult” trading conditions of 2016/17.
He said the company made material progress in the second half of the year following a management shake-up that saw Edwin Booth step in as chief executive in May 2017.
Taking out Easter distortions, total sales were down 1.3% year on year - or £3.3m - all of which was attributable to the first half of the year. The accounts state that rolling 12-week sales improved from a 7% fall at the start of the year to flat by year-end.
Murray said this progress had continued into its new financial year.
“We’ve been working hard to bring back what made Booths special for 170 years after a difficult trading period,” he said. “As Edwin started to play a greater role in the organisation and we formed a new executive team from the middle of last year we have started to see a positive response.”
“We’ve done a lot in the past 12 months - our customer numbers are continuing to grow strongly and ahead of the market and we’re delivering sales growth and profit targets. The business is back into a position where it is getting better week on week and year on year.”
While retaining its premium position, Booths has regained customers by investing in its every day price position after “losing touch with what value meant,” Murray said.
Its capital expenditure for the year was a historically low £1.1m after hitting pause on its store investment plans for the past two years. However, since year-end Booths has invested back into its store estate, revamping the layouts at its Media City and Carnforth stores.
The group has looked to grow its business outside its traditional retail roots, building its wholesale supply business in the North West and penning an agreement to supply Booths branded products to 300 London post codes via Amazon Fresh.
The Grocer revealed earlier this year that Booths had effectively called off any sales process after appointing investment bank Rothschild to explore strategic options in November.
Murray commented: “Rothschild has helped us out on a number of things, but we are singularly focussed on growing the business.”