Variety retailer B&M issued a profit warning after UK sales fell in its latest half year trading update.

The chain saw UK like-for-like revenues dip 1.1% during its second quarter.

The business now estimates that its half-year underlying earnings will plunge 28% to roughly £198m.

The figures follow B&M seeing wage costs rising by approximately £30m during its first half to 27 September. This added to a £14m packaging tax hit as part of the new extended producer responsibility rules.

B&M forecasts that its full-year underlying earnings will be between £510m to £560m, marking an 18% decline on last year.

Although the company said it was taking “decisive actions” to improve its performance, it warned that these would take up to 18 months to see results.

“We are confident they will restore B&M’s value proposition and support a return to sustainable like-for-like sales growth for B&M UK,” the retailer said in a statement. 

B&M CEO Tjeerd Jegen added: “Since becoming CEO in June, I have led the business through a comprehensive review of our customer proposition and operations.

“We have concluded that while B&M’s value proposition remains strong, our operational execution has been weak.”

He continued: “This has impacted our first-half trading performance, and this is reflected in the full-year outlook.

“We have already sharpened our price position, and we are moving with pace to refocus our ranges, improve on-shelf availability and bring back excitement to our stores.

“We have more work to do, but we are confident these changes will restore consistent like-for-like sales growth over time.”

B&M named Jegen as its new boss in May. The exec took over the post from Mike Schmidt, the retailer’s chief financial officer who had seen serving as interim CEO, from 16 June.

The variety store retailer witnessed a 4.4% uptick in its first quarter sales in July, as the warmer Spring weather drove demand for its garden and outdoor furniture ranges.

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