Upmarket grocer Booths has reported a fall in pre-tax profits after depressed consumer spending and “intense” competition in grocery took a toll.
Pre-tax profits fell to £5.9m in the year to March 31 2012 from £8.2m the previous year because of pressure on trading margins and a one-off refinancing cost of £1m.
Booths said it recorded “modest” sales growth of 1.2% to £273.6m in the year. EBITDA fell 2.3% to £17.9m.
However, chairman Edwin Booth told Retail Week that trading since year-end has begun to improve after Booths opted out of the price war which has engulfed the grocery sector.
He said: “Consumers were buying as much as they could on deals and were increasingly attracted to offers on single lines as opposed to multi-buys.
“Rather than reduce more prices, Booths started to develop initiatives centred on its core expertise –high quality food and drink. These have already started to drive improved profitability in the present financial year.”
He added: “We have made a conscious decision to develop increased authority in the retailing of food and drink and we are going to express this with strong and attractive branding.”
The retailer opened two new-format stores in Penrith, Cumbria, and the BBC’s MediaCityUK complex in Salford in the year. Booths has since pushed the button on a £2m roll-out and all 28 of its stores will be revamped over the next 14 months.
The grocer is stepping up its multichannel offer after relaunching its website and re-introducing click-and-collect, piloted last Christmas, during this year’s festive period with a view to making the service permanent next year if it is successful. It has also developed a dedicated website to liaise with suppliers.
Booths closed its dedicated wine site, everywine.co.uk during the year. Booth said: “The board decided that the business should concentrate all its efforts on the core grocery offer. The business has learnt a great deal from this exercise and we are continuing to develop trading relationships with our customers over the internet.”
The retailer has created an internal “efficiencies group” with the aim of adopting “the most efficient operating methods”. It said early results had been “impressive” and that they will have a “positive impact” in the next financial year.