Best & Less has become the latest retailer to report deteriorating sales as the cost of living crisis bites into consumer spending.
The discount variety retailer has recorded a more than 13 per cent drop in its sales from May to June, and it expects its half-year profit to flop by as much as two thirds.
This half-year is expected to see Best & Less bring in total revenue of between $310-315m and a net profit after tax (NPAT) of $3.6m and $4.2m.
Those revised NPAT figures are considerably down compared to the previous expectations of a profit between $10-12 million.
The company said trading conditions “have continued to soften”, with sales and foot traffic lagging on the year prior.
It also acknowledged “more challenging trading conditions” amid rising inflation and declining consumer spending.
Total sales were down by 11.7 per cent or $9m while like-for-like sales, which records the growth by the same number of stores a year ago, slumped by 13.2 per cent.
The company blamed other retailers widespread discounts and sales for the drop.
“In-season promotional and discount activity to clear winter stock has been accelerated, and yearly inventory is also being reduced to align Best & Less’s inventory position with current demand and maintain inventory quality,” it said in a statement.
“This activity has negatively impacted gross margin in the fourth quarter, which is expected to continue into the first quarter of 2024 as the winter season is closed out.”
Best & Less is currently in the midst of a $237m takeover bid from billionaire entrepreneur Brett Blundy.
The off-market takeover offer to acquire all of the shares in the company has since been declared unconditional.