High street health and beauty giant Superdrug has shrugged off rising tax burdens and wage costs to expand its workforce by more than 600 roles and post a jump in pre-tax profits.
In newly filed accounts for the year ending 2024, Superdrug reported a pre-tax profit of £136.8 million, up from £111.6 million the year before. The performance came despite what the company described as “pressure” on its margins due to government-imposed hikes in the National Minimum Wage and employer National Insurance contributions.
The company’s headcount rose from 13,845 to 14,479 in 2024, adding more than 600 new roles, including through the opening of 13 new stores. This builds on the 400 new jobs Superdrug created in 2023.
However, the retailer warned that legislative changes from Chancellor Rachel Reeves’ budget have “compounded wage inflation” and added a “strain” to operating costs — concerns echoed in recent weeks by rival retailers including Bodycare.
“Government-driven decisions on areas like National Minimum Wage have compounded wage inflation and continue to put pressure on operating margins for retailers,” Superdrug said in a statement signed off by its board. “The company strives to offset [this] through its cost efficiency and procurement activities.”
Superdrug’s revenues also rose over the period, from £1.5 billion to £1.6 billion.
Despite the positive results, the business warned that consumer sentiment remains cautious amid ongoing cost-of-living pressures. “Customers shopped around as they became more price sensitive,” the board noted, citing reduced high street footfall and squeezed disposable incomes.
Still, the health and beauty sector was one of the few retail categories to see year-on-year sales growth, and Superdrug credited its broad product offering and dual-channel approach — in-store and online — with helping it weather the storm.
Looking ahead, the company said it expects the UK retail environment to remain “challenging and strongly competitive” in 2025. Nevertheless, the directors said they remain confident that their growth strategy will enable the company to maintain momentum.
“The directors are confident that the strong trading performance in 2024 will continue into 2025 and beyond,” the filing stated.
Superdrug is owned by AS Watson Holdings, a Hong Kong-based group incorporated in the Cayman Islands. Sister brand Savers, also part of AS Watson, reported a rise in revenue from £754.8 million to £791.3 million and saw its pre-tax profits climb from £61.2 million to £69.9 million.
The update comes shortly after rival Boots reported a mixed financial year, with strong revenue growth and a surge in pre-tax profit for its Boots UK arm — up from £60 million to £269 million — despite closing more than 300 stores as part of a restructuring plan.
As the battle for high street dominance continues, Superdrug’s resilience in the face of rising tax and labour costs positions it as a key player determined to grow despite the economic headwinds.
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Superdrug adds over 600 jobs and boosts profits despite tax and wage pressures