UK retailer Superdrug has reported an impressive 2015 full year result as strong performance in the makeup, beauty accessories and fragrance categories drove like-for-like sales growth of 6.6 per cent.
It is clear that not only does the retailer’s core proposition resonate with consumers, but that Superdrug has a strong control over margins and costs, as operating profits increased by 62.4 per cent to reach £62.2 million.
The value specialist’s product range has been boosted by a range of designer fragrances which have proven popular with shoppers. Superdrug’s grasp of changing trends in health and beauty is evident by the 31 per cent year-on-year growth in diet and fitness product sales; as the retailer capitalised on growing consumer interest in a healthy lifestyle by introducing more diet and fitness products to its portfolio and opening its second Superdrug Wellbeing store in Watford.
Superdrug’s eCommerce proposition continues to evolve to incorporate health services such as the newly introduced Superdrug Opticians, which joined the Online Doctor service which saw growth of 69 per cent year-on-year (although from a low base). In addition, the introduction of cosmetic services such as eyebrow shaping, nail treatments and Glitter Lips are differentiating Superdrug’s offer from its closest rival Boots, and adding to the retailer’s destination status.
Keeping this momentum going will be imperative in 2016 as impending economic and political instability is likely to exert some pressure on consumer pockets. Given its value proposition, continued store rollout program and burgeoning service proposition, Superdrug is well placed to take advantage of this evolving landscape over the rest of 2016, as value for money increasingly becomes consumers’ priority.
- Andrew Hall is an analyst with Verdict Retail.