Online fmcg retailer Discount Dragon has moved into operational profitability for the first time, according to a trading update.
The online discounter, which sells clearance stock often close to its sell by date, broke even after undertaking a “full review” of the brand to improve the range.
Discount Dragon revenue was up 10% to £5.4m in the first half to 30 June, with orders up 14%, amid a transition to automated fulfilment in partnership with THG, which is expected to complete by Black Friday on 28 November.
The brand made a £750,000 net loss in the first half to 30 June before moving into profitability in August as a result of improvements, the trading statement said.
Huddled Group CEO Michael Ashley, who was appointed in July, told The Grocer: “What I found with Discount Dragon is we had quite an inconsistent range proposition. We had limited choice in the key categories of food, cupboard, tea, coffee, and household.
“We were lacking good, solid retail category management, in how we present the products.
“So we’ve focused on better product availability and we’ve concentrated hard on greater choice on key brands in household, food cupboard, alcohol, tea and coffee.
“And I’d say we’ve made great progress, and that’s really underpinned us moving into operational profitability in Discount Dragon for the first time in August and September.”
He said the move to profitability had been driven by a 20% quarter-on-quarter improvement in basket margin.
Ashley said Discount Dragon was now having “some very exciting conversations with some of the big guys in grocery as we look to go direct to manufacturers to get their surplus”.
Group revenue increased 81% to £9.48m as the company saved a claimed four million items from going to waste.
Discount Dragon is the largest brand owned by ‘circular economy e-commerce business’ Huddled Group, the others being Boop Beauty and Nutricircle.
Healthier food-focused Nutricircle, which the group acquired in April last year, grew revenue by 621% to £2.5m in half one.
Boop Beauty hit £1.58m in first-half revenue, having amassed a database of over 50,000 customers since its relaunch in September 2024.
Huddled chair Martin Higginson said the group expected to be operationally profitable aside from head office costs by this month.
“I’m delighted to report that the growth achieved during the period and since, alongside the hard work the team have put in, has positioned the group to reach a major milestone,” he said.
“Based on current trajectory, we expect the group to be operationally profitable before head office costs in September 2025. The 81% revenue growth in H1 2025, combined with our focus on improving basket composition, average order value and basket margin, has helped us begin to deliver this.”
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