Superdrug sees profits jump on loyalty card deals
High street health and beauty chain Superdrug has notched up a surge in annual profits after opening a raft of stores and as loyalty card deals helped boost sales.
In its latest set of accounts, the group posted a 43% surge in pre-tax profits to £111.6 million for the year to December 30 2023 as sales jumped by 11.8%.
It saw strong retail sales growth - up 12.5% - after opening another 14 sites over the year, focusing on retail parks, as well as larger shops such as in Manchester's Trafford Centre, Brent Cross Shopping Centre in London and Braehead in Glasgow.
The chain also gave 45 stores a revamp over the year, including new shop fronts, layouts and upgraded store wifi.
Superdrug said strong demand for own-brand products helped drive the strong performance, with customers flocking to snap up its Optimum Collagen Night Cream, which sold out twice, while the chain's Studio London cosmetic range also proved a hit with shoppers.
The group said it cut prices of some of its ranges to help shoppers amid the cost-of-living crisis, such as its Solait sun protection products, while also rolling out extra loyalty card price reductions to its Health & Beautycard members.
It saw loyalty card membership jump to 18.1 million at the end of last year, with more than 60% of total sales now made through members.
Peter Macnab, chief executive of Superdrug, said: "As inflation continued to put pressure on households, at Superdrug we've invested heavily to keep our prices competitive and help families keep costs down."
But the group flagged a cautious outlook for consumer spending and the wider retail sector this year.
It said: "The directors expect that the UK retail environment will remain challenging and strongly competitive in 2024, with a heavy focus on price.
"Consumer sentiment remains subdued as inflationary pressures and high interest rates continue to impact disposable income, whilst at the same time businesses are seeing significant increases in their cost base driven by large increases in wage costs and business rates.
"However with the right retail proposition and customer service there is potential solid growth and returns to be achieved."
