Latest accounts filed for the A.S. Watson-owned Superdrug and Savers chains show both delivered strong sales and profit growth last year.
Over the 52 weeks to 30 December 2023, Superdrug saw sales increase by 11.8% to £1.53bn after its market share grew for the third consecutive year to 10.6%. The health & beauty retailer stated that the positive figures had been driven by strong store performance, increased sales volumes, and continued own brand growth.
Meanwhile, pre-tax profit jumped 43% to £111.6m after a review of costs, coupled with the uplift in sales, resulted in operating margin increasing from 6.5% to 8.0%.
Superdrug’s investment in its store estate also contributed to the robust sales growth during the period, with 14 new outlets opened in locations such as The Trafford Centre in Manchester, Brent Cross Shopping Centre and Braehead – Superdrug’s largest store in Scotland. Its larger stores offer more beauty and health services.
Superdrug also revamped 45 existing stores over the course of the year, with updates such as new floor layouts and upgraded fascia and internal signage.
The retailer noted that volume sales for total revenue increased by 4.2% year-on-year, driven by its strategy to list up-to-the-minute ‘Made by’ Superdrug products. This is said to have provided the company with a significant point of difference and allowed it to showcase its innovation in the health & beauty market.
Superdrug’s CEO Peter Macnab commented: “Our vision is to be the UK’s leading accessible health & beauty retailer with high quality, affordable products at the heart of everything we do. Our financial results demonstrate the trust that customers are continually putting in us and I would like to thank our colleagues for their ongoing hard work and commitment and for living and breathing our vision every day.
“Over the last year, we’ve continued to invest in our store estate to provide customers with best-in class shopping experiences. The strong store sales growth gives us the confidence that our strategy is working, and new stores are being welcomed by customers and the local community.”
In May, Superdrug revealed that it plans to open 25 new stores during 2024 as it marks its 60th year on the UK high street.
Meanwhile, it was a similar picture at Superdrug’s value-oriented sister chain Savers. Over the same period, its revenue climbed 12.2% to £754.8m as it attracted price-conscious shoppers during the cost of living crisis.
Pre-tax profit jumped 30.4% to £61.3m after operating margin rose from 7.6% to 8.6%, driven by its sales performance. The retailer opened nine new stores during the period, taking its estate to 519 sites. It also opened an additional distribution facility in the North East to support its future growth.
NAM Implications:
- The obvious question is how your Superdrug/Savers business compared in sales & profits.
- And the extent to which you accessed and maintained your fair share of each…
- Branded suppliers need to keep in mind the 4.4% year-on-year volume growth…
- …driven by up-to-the-minute ‘Made by’ Superdrug products i.e. own brand.
- And the more the brand switchers are satisfied by ‘comparable’ own brands…
- …the greater the difficulty in winning back brand loyalty.
