When chasing life-long passive income, owning a random group of dividend shares simply won’t do the trick. The London Stock Exchange is filled with dividend-paying enterprises, making UK investors spoilt for choice. But just because a firm makes payouts to shareholders today doesn’t mean it will continue to do so 20 or 30 years from now.

That’s why, when investing for long-term income, I’m focused on finding businesses that can continuously expand operations to fund an ever-increasing dividend. And right now, B&M European Value Retail‘s (LSE:BME) grabbed my attention.

Reliable dividend shares?

Retail can be a fickle industry. And looking at the track record of industry titans like Tesco doesn’t exactly scream dividend growth opportunity. After all, even after a decade, the UK’s largest grocery retailer’s dividend still hasn’t recovered after being wiped out in 2015. And its share price has only climbed a mediocre 25% since January of that year.

Yet, looking at B&M, the story’s rather different. With inflation ravaging household budgets, its B&M and Heron Foods stores have seen a significant increase in footfall over the last few years. Both have a reputation for lower prices, even on branded products.

The group’s market penetration’s nowhere near what Tesco’s achieved. However, its operating profit margins are some of the highest in the industry at 11.1% versus the sector average of 3.1%. And with more earnings flowing to the bottom line, the dividend track record’s been admirable. Since 2015, shareholder payouts are up 330% with the stock price climbing by nearly 50%.

Earning triple digits

Like many dividend growth stocks, B&M’s current yield isn’t jaw-dropping. It currently stands at 3.4%, roughly in line with the FTSE 100. But while today’s yield’s fairly average, it’s still enough to unlock a triple-digit passive income. And as more families seek to save on their weekly shop, future dividend hikes could push this yield higher over time.

Regardless, to earn £100 passively right now, I’d need to invest just shy of £2,950. At the current share price, that would add 692 shares to my portfolio. But if dividend payments were to be automatically reinvested, I could end up with considerably more as compounding works its magic over the next decade and beyond.

Risk vs reward

Saving money isn’t likely to go out of fashion any time soon. Hence why I think B&M’s set to be a long-term winner, especially given its ongoing and lucrative international expansion. However, it’s impossible to ignore the threat of competition.

B&M’s not the only discount retailer out there. And even companies like Tesco are fighting tooth and nail to keep their customers with price-matching schemes and loyalty programmes. Convincing someone to permanently change their usual shopping destination is no easy feat, especially when economic conditions eventually return to normal.

Nevertheless, the firm’s current strategy seems to be working for now. And given its track record, I’m happy to take the risk of giving B&M the benefit of the doubt. That’s why I’m planning on adding this enterprise to my income portfolio once I have more capital at hand.