Annual sales and profits have increased markedly at Superdrug after the health and beauty chain added more stores to its British high street estate.
Pre-tax profits jumped by 43.6 per cent to £111.6 million in the year to the end of December, compared with the year before. Revenue rose by 11.8 per cent to £1.52 billion as it recorded a third consecutive year of market share growth.
Sales by volume increased by 4.2 per cent year-on-year, thanks to the continued expansion of its cheaper, own-label products. Nevertheless, exclusive launches from brands such as Bioré SPF and Nyx X Barbie and of fragrances by Billie Eilish were said to have made up a high proportion of sales.
The opening of 14 stores last year, in locations such as The Trafford Centre in Manchester and the Brent Cross shopping centre in north London, and the refitting of 45 stores also drove sales.
Founded in 1964, with its first branch in Putney, southwest London, Superdrug is owned by AS Watson Holdings, which is incorporated in the Cayman Islands and is based in Hong Kong. It is the second largest high street beauty retailer behind Boots, with 784 stores in the UK and the Republic of Ireland.
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Traditional beauty chains such as Superdrug and Boots endured a fall in demand during the pandemic as people ditched make-up or turned to online rivals. However, since then they have benefited from a return to physical shopping and a resurgence of weddings and parties, which has increased demand for make-up.
“As inflation continued to put pressure on households, at Superdrug we’ve invested heavily to keep our prices competitive,” Peter Macnab, 66, the chief executive of Superdrug, said.
However, the group noted a cautious outlook for consumer spending and the wider retail sector this year. “The directors expect that the UK retail environment will remain challenging and strongly competitive in 2024, with a heavy focus on price,” it said.
“Consumer sentiment remains subdued as inflationary pressures and high interest rates continue to affect disposable income, while at the same time businesses are seeing significant increases in their cost base driven by large increases in wage costs and business rates. With the right retail proposition and customer service, there are potential solid growth and returns to be achieved.”
Boots recently reported a surge in its pre-tax profits for its latest financial year.
