The A.S. Watson-owned Superdrug and Savers chains both delivered strong profit and sales gains last year as they continued to recover from the effects of the pandemic.
Newly filed accounts covering the 52 weeks to 31 December 2022 show revenue at Superdrug climbed 17.0% to £1.37bn. The retailer noted that after Covid concerns eased, it saw a recovery in all retail destinations, culminating in robust Christmas trading.
The health & beauty chain’s pre-tax profit jumped 71.7% to £77.8m as footfall to its stores increased. An efficiency drive also helped lift operating margins from 5.1% to 6.5%.
Superdrug opened 12 new outlets, ending the period with 789 stores in the UK and Ireland. It also focused on refurbishing existing sites and has recently announced plans to invest in 25 new stores in 2023.
Meanwhile, the group’s online store was re-platformed as part of its strategic investment into “Offline plus Online” (O+O) retail, which aims to provide “seamless accessibility and experience, regardless of how customers choose to start or conclude their shopping”. It noted whilst many consumers had shifted back from online to physical stores, online sales volumes had continued to track “significantly ahead” of pre-pandemic levels.
Superdrug also hailed the success of its loyalty programme in driving sales and the increased proportion of revenue coming from its own brand lines. It has recently been pushing its value credentials to attract shoppers during the cost of living crisis. This has included various promotions and price freeze initiatives.
Superdrug’s CEO, Peter Macnab, commented: “Our annual report shows the real resilience and strength of the Superdrug business, despite ongoing inflation and upwards pressure on business costs.
“Throughout 2022, high food, energy and domestic costs continued to put severe pressure on household incomes. At Superdrug, we remained committed to supporting customers through the cost of living crisis, working with Jack Monroe and becoming the first health & beauty retailer to introduce price freezes on essential products, ensuring we brought best-in-class health and beauty at competitive prices, the success of which we see reflected in the growth of our own brand offering and the great take-up of Members Only Pricing.”
He added: “Christmas 2022 was a particularly positive trading period for Superdrug and we have certainly carried this momentum into 2023, with customer footfall continuing to increase and all of our categories performing well, particularly cosmetics, which had a turbulent few years throughout the pandemic.”
Download the Superdrug 2022 factsheet
Meanwhile, it was a similar picture at Superdrug’s value-oriented sister chain Savers. Over the same period, its revenue jumped 18.6% to £672.6m as trade picked up during the year.
Pre-tax profit rose 16.3% to £47.0m, although operating margin slipped from 7.8% to 7.6% due to cost inflation across its business.
Savers increased the size of its trading estate to 517 stores, whilst sales on its website grew “significantly” following an expansion in the product range.
NAM Implications:
- Patently a robust success story On and Offline.
- Raising the key issue for suppliers:
- How did your Superdrug and Savers business compare over the same period.
- i.e. ensuring achievement and maintenance of fair share of sales & profits…
- …especially at times of spectacular performance.
