Shares in B&M European Value Retail (BME) have just hit a new record high of 439.9p following a materially better than expected first quarter that included a welcome uptick in June trading. The update led analysts to upgrade their earnings forecasts for the year, acting as a share price catalyst.

Price-conscious shoppers have warmed to the essential goods retailer’s core B&M UK chain, which sells a variety of goods from mostly out of town locations where it is easier to shop safely.

But with non-essential rivals having reopened, and given the structural shift to online and the impact of social distancing, will B&M be able to keep hold of its recently secured market share gains?

For the first quarter to 27 June, like-for-like sales in the B&M UK business grew 26.9% amid broad-based growth across grocery and non-food products, while group revenue grew 27.7% to north of £1.15 billion.

With people stuck at home, cut-price general merchandise purveyor B&M has benefited from bumper sales of everything from groceries and fast-moving consumer goods to DIY and gardening and home products.

Quilter Cheviot analyst Amisha Chohan believes B&M is winning market share, has attracted a new middle-class client base and as a business will continue to outperform peers especially in a recessionary environment.

Being a discounter, B&M’s appeal is strengthened when large sections of the population are worried about their personal finances or are having to live within straitened household budgets.

B&M UK stores are increasingly in high quality locations and are not dependent on shopping malls or anchor department stores to generate footfall.

An additional strength is the breadth of B&M’s product range, which delivers a balance to the retailer’s financial performance from year to year and allows the company to absorb downturns in any one product category.

In the first quarter update, chief executive Simon Arora stuck with his cautious outlook, pointing to ‘a great deal of uncertainties ahead’. While the high street has reopened, footfall remains muted with many consumers cautious about Covid-19 and/or continuing to work from home and ordering their goods online.

While the backdrop is testing, Shore Capital believes B&M is firmly in the retail survivor camp and remains a well-managed company with good cash generation and tight stock and cost controls. However, the broker noted the continued cautious outlook with uncertainties from the pandemic. It said: ‘It remains to be seen how long the social distancing rules will remain in place and what impact this will have on (B&M’s) peak trading this Autumn.’

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