Discount beauty retailer Savers outperforms Superdrug in 2017

By

Barbara Santamaria

Published
Jul 5, 2018

Savers, a discount health and beauty retailer owned by AS Watson, saw its revenues soar 10% in financial year 2017, outshining its sister retailer Superdrug.

The company has more than 411 stores across England, Scotland and Wales, and focuses on the low-end market with mega discounts offered throughout the year.

According to GlobalData, a consultancy, the chain is growing faster than Superdrug, which grew by 2.3% to £1.24 billion during the period. Its business remains significantly smaller, however, with revenues of just £460.3m.

But there is opportunity for growth as Savers also outperformed the health & beauty market last year (up 3.1%). This market is expected to grow by 16.5% over the next five years, an opportunity Savers will try to capitalise on as it continues to gain market share.

Additionally, profits have continued to grow at the health and beauty discounter. Despite ongoing investment in its store portfolio and greater costs from the supply, GlobalData said Savers increased its operating profits by £7.8m to £46.5m, while operating margin rose to 10.1% versus 9.3% last year.

The upward growth trajectory is likely to continue if the retailer upgrades its older stores and opens new sites to improve brand awareness and consumer accessibility, said Zoe Mills, retail analyst at GlobalData.

“The retailer can afford to revamp its existing store estate to further supplement its increasing popularity in the market. Its older stores in particular lack visual merchandising and investment could improve overall the shopping experience and brand perception,” said the retail analyst.

Savers stores sell products from well-known brands including L'Oréal, Nivea, Dove, Maybelline, Rimmel and Olay.