Profits plunge at retailer Superdrug

The escalating price war between UK retailers has taken its toll on Superdrug. According to reports in The Times and Namnews, the drugstore chain, part of the AS Watson group, saw its operating profit fall 20% to £20.3m in the year to December 2005 on the back of flat underlying sales and a meagre 1% hike in total sales to £998.8m.

Superdrug says: “Underlying operating profit reflected the difficult and competitive high street trading conditions that were prevalent in 2005, although gross margins were improved.” Md Euan Sutherland said technical accounting changes and the £28m refurbishment programme also hit profits. But Sutherland also said that underlying sales growth had moved up a gear to 4.2% in the three months to 30 June and total sales rose 7.3%. The company plans a massive step up in expansion in addition to the 24 new stores expected by the end of the year.

The store also received less than ideal media coverage for its handling of the launch of the Intimately Beckham his and hers fragrances recently when it hired a couple of lookalikes to promote the fragrances outside its Oxford Street store in London.