Superdrug profit jumps as low prices attract squeezed shoppers

Superdrug boosted its profit before tax 22.6% in 2024, as the beauty retailer’s promotion-led offering and “everyday low prices” attracted shoppers through the door.

Defying tough trading conditions, including a 2.2% fall in footfall over the calendar year [BRC Sensormatic 2024], Superdrug managed to grow revenue 7% to £1.63bn, thanks in part to the opening of 13 new stores over the year, steady from the 14 opened in 2023.

Profit before tax grew to £136.8m from £111.6m, and operating margin rose to 8.8% from 8%. Superdrug put its increasing profitability down to sales growth, aided by a “continued focus on productivity and cost efficiency”. Market share grew 0.2 ppts to 3.8%.

The company also added around 600 staff to its books, despite “government-driven decisions on areas like national minimum wage compounding wage inflation and putting pressure on operating margins for retailers”, according to its accounts filed at Companies House.

The retailer’s combined ‘Offline plus Online’ strategy, including a 30-minute click & collect service, refurbishment of its 9,900 sq ft flagship Westfield Stratford store, and its emphasis on membership pricing deals, all contributed to bolstering sales against the tough economic backdrop, according to Aliyah Siddika, retail analyst at GlobalData.

She pointed out Superdrug’s strong customer enrolment figures, with 38% of UK customers on its books as members, making it the second most popular health & beauty loyalty scheme behind Boots’ ironclad 78.9% membership.

Siddika also praised Superdrug’s ability to capitalise on the TikTok-powered trend for teen skincare, as well as its walk-in support offered to teens in its pharmacies, initially rolled out in three locations.

She added: “The recent launch of its in-store Beauty Playground, with interactive zones featuring new and exclusive brands and social stations to facilitate filming beauty content, demonstrates Superdrug’s commitment to engaging younger beauty enthusiasts and leveraging the influence of social media. 

“This strategic move will help Superdrug appeal to a broader customer base and solidify its position in the evolving health & beauty market.”