Sales at health & beauty value retailer Savers surged 19% to £672.6m as shoppers returned to stores post-pandemic last year.
The lifting of the government’s Covid restrictions in January was followed by improved footfall across stores, according to the retailer’s accounts for the year to 31 December 2022.
Profit before tax increased by 16% to £47m as operating margin was squeezed from 7.8% to 7.6%, driven down by inflationary pressures including the impact of the war in Ukraine on energy and fuel costs.
The AS Watson-owned retailer’s transactional website grew significantly during the year through the expansion of its online range, according to the accounts.
Savers had 517 stores at the end of the period, a slight decrease from a year earlier, when it had 519.
GlobalData retail analyst Sophie Mitchell said the analytics company’s June survey of 2,000 UK consumers found 6.6% of consumers were switching to cheaper retailers for their beauty shopping and 13.9% were switching for toiletries. Within those figures, 9.8% of consumers were switching to Savers from major retailers including Boots and Tesco for their beauty shopping, she said.
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“This bodes well for Savers’ full-year 2023 as consumers continue to shop at the retailer in search of lower-priced products, although the focus of major retailers, including Boots and Tesco, on lower prices through loyalty card pricing, could threaten this,” said Mitchell.
Meanwhile Savers’ online expansion provided “a key point of difference for the retailer to compete with the likes of B&M”, she added.
She said Savers’ standard delivery charge of £2 for orders over £30 was also a “distinctly better” proposition than Poundland’s minimum £5.95 for standard delivery, offered via Poundshop.com.
B&M pulled the plug on a fledging online home delivery trial in January this year, just seven months after launching the pilot. The retailer’s recent annual report argued that “sustainable and profitable online business models remain unproven and this is to our advantage, where we offer low prices without suffering from margin dilution due to cross-subsidisation of online activities”.
Full-year accounts from Savers’ sister retailer Superdrug last week revealed it had also seen sales and profits boosted by improved footfall alongside an expanded online offer.
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