Superdug sees strong results as new stores and promo pricing win loyalty

Superdrug has filed its accounts for 2024 and they showed the company continuing to make the most of a buoyant beauty market and key sales growth initiatives.

The health & beauty retailer said revenue increased to £1.634 billion from £1.528 billion with gross profit up to £236.4 million from £201.2 million. Operating profit jumped to £144.2 million from £121.9 million and profit before tax reached £136.8 million from £111.6 million. The final figure, net profit, was £103.5 million, up from £83.2 million.

So, as we can see, it looks like a strong year for the business, but what exactly went right during the period?

It’s been a tough decade generally for the UK retail sector, but Superdrug appears to have been one of the winners. In 2023 its sales increased by almost 12% and in 2024 they rose by 7%. That was despite retail footfall being subdued all year. The retailer said that it showed resilience in both its stores and online channels and as far as those stores were concerned, it opened a number of new ones as well. It has kept up a steady opening programme for several years and after opening 14 in 2023 it opened 13 in 2024.

Refurbishing existing locations was also important. For instance, in 2024 its Stratford Westfield store reopened following an extension and became the largest store in its estate with a trading area of 9,900 sq ft.

But as well as the focus on its physical spaces, online is very important to the business and last year was helped by improvements to the user experience on the website, and the launch of a new version of its app, as well as a range of customer-centric delivery options being added including a 30-minute click & collect service. 

It was also helped during the year by a focus on everyday low prices, which appears to have gone down well during the ongoing cost-of-living crisis when it said consumers became even more price-conscious than they already were.

Its loyalty card programme was also important here with members-only pricing deals continuing to play a part in its successful promotional offering. As well as the standard promotions open to all, it said promo pricing has helped to deliver an increase in visit frequency and loyalty.

Aliyah Siddika, retail analyst at GlobalData, was impressed but thinks there’s more to do: “Superdrug’s integrated ‘Offline plus Online’ strategy has yielded strong results. This result is impressive given the strong comparative of the previous year, showing that the retailer has gained market share this year, up 0.2ppts to 3.8% in 2024. The loyalty programme is still a cornerstone of its customer engagement strategy. With 38% of UK consumers enrolled, Superdrug boasts the second most popular health & beauty loyalty scheme, according to GlobalData’s UK consumer survey. However, this figure is nearly half Boots’ membership (78.9% of UK consumers), highlighting that Superdrug must offer a more generous points and rewards system to strengthen its position and support further sales growth.”

She also thinks the company is taking the right steps to reach key consumers: “Superdrug is launching a dedicated teen skincare service in its pharmacies, providing complimentary walk-in support, expert advice, and bespoke treatments. Initially rolled out in three locations, this initiative aims to attract a younger demographic and drive footfall across all pharmacies. Given the recent challenges UK pharmacies have faced in maintaining profitability, Superdrug’s investment in its pharmacy chains is a well-timed strategy to address these issues. 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.”