Heron Foods is struggling to meet its long-term estate growth target of 20 new stores a year, a new report has revealed.
The B&M-owned frozen food retailer opened far fewer shops compared to its annual average this year, opening 16 stores in the year to 26 March 2022, but also closed 11 operational stores – meaning its estate grew by five branches.
The previous year, in 2020-21, Heron Foods opened 17 branches and closed four, but scaled back its usual target to 15 new stores owing to the disruption of the pandemic.
Subscribe to Grocery Gazette for free
Sign up here to get the latest grocery and food news each morning
It also fell short of 20 in 2019-20, opening 16 stores while closing four.
Turnover for the retailer dipped 3.5% to £419m in 2021, following a boost in sales the previous year assisted by the pandemic.
Operating profit fell 11% to £11m as margin reduced slightly against the backdrop of a competitive market, logistics challenges and inflationary pressure on stores and wages.
B&M’s latest annual report, published in June, puts the Heron Foods estate at 311 stores.
However, it is not the only retailer to struggle to meet a long-term estate growth target.
In September, Aldi UK and Ireland CEO Giles Hurley acknowledged the German discounter’s store opening programme was proving more challenging than anticipated, thanks to delays in securing planning permission and objections by rival supermarkets.
Iceland MD Richard Walker also complained of lengthy planning delays earlier this year, as its energy bills hit a £20 million monthly increase.
Despite falling short for a number of years, Heron Foods’ latest accounts reiterate the long-term target for the year ahead. “Central to the future success of the company is the store growth plan,” the accounts said.
“The company has a strong pipeline for new store openings through FY23. The directors have set a target of 20 new stores for FY23. The company will continue to refurb and relocate stores as and when required.”
