Home Bargains
£492 million profit last year. A 10.8% margin, selling items priced at £1.49. Home Bargains, two biggest rivals spent the year in crisis.
ALL BREAKDOWNSTHE BREAKDOWNFEATURE
8/18/20265 min read
£492 million profit last year.
A 10.8% margin, selling items priced at £1.49.
Home Bargains, two biggest rivals spent the year in crisis.
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The setup
Tom Morris opened his first Home Bargains shop in Liverpool in 1976. He was 21. His father ran a corner shop on the city's Scotland Road called V's and the son turned the same instinct for a deal into a chain of 632 stores.
The model hasn't really changed since: buy stock other retailers can't shift, at a price nobody else will match and sell it cheap in volume. No advertising. No merchandise department. No customer research.
The model is just buying and selling.
That is now a £4.5bn business. Turnover reached £4.5bn in the year to June 2025, up 7.8%, and operating profit rose 13.3% to £492m, a 10.8% margin on shelves stacked with 79p bread and £1 cups of tea.
Its two biggest rivals had a harder year. B&M's UK business posted like-for-like sales down 3.1% and group pre-tax profit fell 11.4% to £431m; the year after, that nearly halved again, to £227m.
Poundland's owner Pepco sold the chain for a nominal €1 in June 2025, after it had shrunk to 5% of group profit while still generating a third of group revenue.
The players in this category sells cheap stuff. Only Home Bargains kept growing.
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The playbook
1. How Home Bargains actually makes money
It carries no paid advertising and does no customer research. It has no merchandise department and no planograms. Most retailers use them to standardise every shelf. Home Bargains doesn't bother.
Store managers arrange stock to what works locally, which keeps products moving from the back of the shop to the front instead of piling up and keeps availability high without adding head office cost.
Cafés and garden centres do a similar job on footfall. Rivals have been ripping cafés out. Home Bargains has 35 and is adding around 10 a year, selling a cup of tea for £1. It has 75 garden centres, with 15 more planned annually.
Its food range leans further into fresh and chilled than B&M's does, closer in size to a small Iceland. That's what turns a once-a-month trip into a weekly one.
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Takeaway: there's no secret ingredient. Home Bargains strips out every cost that doesn't move stock (advertising, planograms and a merchandise department) and spends the savings on the two or three things that bring people back.
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2. How it grew from £3.4bn to £4.5bn in three years
Revenue is up 63% since 2020, from £2.79bn to £4.541bn. Store count has grown far slower: from 572 in June 2022 to 632 in June 2025, up about 10% in three years, against 33% revenue growth over the same stretch.
About half of new stores are buy-and-build: Home Bargains buys the land and anchors a new retail park with itself, then lets out the surrounding units. It also bought the 21-store Quality Save chain in January 2023, when it had around 550 stores of its own, a useful top-up but too small to explain the broader growth.
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Takeaway: the growth isn't just more shops. Stores are up about 10% since 2022. Revenue is up three times that in the same stretch. The existing stores are doing most of the growth.
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3. Why nobody has copied it
Poundland shows that being a big part of a business isn't the same as being a valuable part of it. It made up a third of parent company Pepco's revenue, but only 5% of its profit.
Around the same time, Pepco started replacing Poundland's own ranges with the same stock it sells in its European stores. That may have taken away exactly the kind of local buying flexibility that keeps value shoppers coming back.
Home Bargains has never had that structure. It has never had a distant parent company and every buying decision still runs through people Tom Morris trained personally, including buying director Daniel Sowden and ultimately through Morris himself.
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Takeaway: there's no secret sourcing deal and no scale advantage nobody else has. What Home Bargains has that Poundland's owner didn't is proximity: the buying judgement never moved away from the people who built it.
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4. The £400m bet on reaching 1,000 stores
Home Bargains has 632 stores and wants 800 to 1,000. The St Helens site shows what that takes: a £400m, one million sq ft distribution centre that began construction in 2022, started store deliveries in May 2025 and automates around 80% of the picking, lifting logistics capacity by more than 57% once fully ramped up. It supports around 300 stores, roughly half the current estate.
A near-identical second site is under construction in Doncaster, designed to support 300 more stores and create 1,000 jobs, due to open in 2028.
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Takeaway: money buys warehouses and land. It doesn't prove 300 more good sites exist, or that fresh food stays this profitable at twice the size.
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5. The problem nobody can automate
The business looks unusually dependent on Morris's own buying judgement and a small senior buying team around him. Morris is 70. No publicly disclosed succession plan was identified in the material available.
Separately, the paperwork that shows who owns the company changed twice between October 2023 and June 2024 and Morris stopped appearing on it as an individual, replaced by a holding company.
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Takeaway: Home Bargains can open more shops without a bigger Tom Morris. Whether it can still buy successfully without him is the “big question”.
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One more thing
In the year to June 2024, the company paid out £1.22bn in dividends. That's up from £36m the year before, and nothing was paid out the year after. Tom Morris, who owned 98% of the company, got most of it.
That's a big, one-off change in how money left the business. It could be estate planning, or the family restructuring for the future. The filings show the money moved. They don't say why.
Either way, the family's prepared for what happens to the money. Nobody's shown they're prepared for what happens to the buying, the actual skill of knowing what to purchase and at what price. And that's the part the whole £4.5bn business depends on.
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The paper trail
Why Scousers call discount store ‘Home and Bargain’
3 minute read
Morris opened in Old Swan aged 21, the original name lasted until the 1995 national rebrand and Liverpool customers still use the old name.
https://www.bbc.com/news/articles/cj9ge41gnp2o
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How Home Bargains is proving king of the variety discounters
6 minute read
The model, described from inside two flagship stores.
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Poundland Breakdown
5 minute read
The breakdown behind the £1 sale.
https://threeexits.com/poundland
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Home Bargains billionaire pays himself over £1bn as sales surge
4 minute read
The £1.22bn dividend detail and Tom Morris's 98% stake, from the newly filed accounts.
https://www.cityam.com/home-bargains-billionaire-pays-himself-over-1bn-as-sales-and-profit-surge/
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Home Bargains shed nearly 1,600 retail staff while adding new stores
2 minute read
The estate expanded from 572 to 594 stores and turnover reached £3.8bn, while average retail headcount fell 6%. Useful reading for the automation, productivity and workforce.
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