B&M European Value Retail (BME) has recorded its strongest first quarter of like-for-like growth in three years as the late Easter and hot weather boosted sales and the return of inflation sent shoppers searching for a bargain.

Revenues increased 18.3% to £656.3m in the three months to 24 June, with UK sales up 17.8% to £598.4m and by 7.3% on a like-for-like basis.

The discount chain said the later Easter earlier this year had added 1% to the headline like-for-like growth figure. The recent hot spell had driven “excellent sales” in seasonal categories, particularly garden and outdoor living, the business added. B&M also highlighted strong grocery sales in the trading update.

CEO Simon Arora said in a bullish statement: “This quarter’s like-for like growth represents B&M’s strongest first quarter for three years. It’s driven by customers, wherever they live throughout the regions, becoming ever more receptive to the outstanding value delivered by B&M’s unique business model in relation to the things they buy regularly for their homes and families.

“In these uncertain times, and with inflation returning to the UK market, more and more shoppers are actively seeking out value in our stores and that means our business is strongly positioned to do well and continue its rapid growth.”

B&M opened nine new UK stores in the quarter – with four opened in Germany – to leave the group with 543 outlets trading at the end of the period. It expected to open between 40 and 50 new stores this financial year, with a greater proportion of these opening during the second half, as it targets a portfolio of at least 950 sites.

“We also have a healthy pipeline of new stores for the following financial year,” the business added.

The second quarter started well for the retailer and it is on track to achieve profit expectations for the full year, B&M said.

Revenues in Germany, where it owns the Jawoll chain, increased 24% in the quarter to £57.9m.

Shares in the discounter soared more than 4% when markets opened this morning but have settled back down to 1.8% higher than Tuesday’s close at 341.1p.

Analysts in the City were impressed with the update. Wayne Brown at Liberum said the strength of discounters would only improve as the structural challenges across the grocery segment deepened.

“This is a very strong performance in a consumer environment that is becoming increasingly challenging,” he added. “Structurally B&M is in a very strong position where an inflationary environment will only serve to widen the value off offer to customers and should drive an acceleration in footfall towards the discount chain.”

Peel Hunt analyst Jonathan Pritchard said the quarter was “predictably very strong” for B&M. “While the macro winds are favourable, B&M is taking full advantage with improved ranges, keen pricing and better store standards. Many will think that like-for-likes will wane as the year goes on: yes, the comp gets tougher, but we would be surprised if B&M ceased to be one of the leading LfL sales growers in the retail sector.”

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