Superdrug has generated over 600 new roles despite the "pressure" on its margins due to tax increases implemented by Chancellor Rachel Reeves.
The high street retailer expanded its workforce from 13,845 to 14,479 in 2024, according to the latest figures filed at Companies House, as reported by .
This surge in employment follows Superdrug's creation of more than 400 positions in 2023.
Despite the financial challenges posed by the hike in the National Minimum Wage introduced by Rachel Reeves, which exacerbated wage inflation, the company opened 13 new stores last year.
Superdrug also noted that the increment in National Insurance contributions has exerted a "strain" on its operational expenses.
Nevertheless, the retailer has successfully navigated these cost pressures, reporting a pre-tax profit of £136.8m for 2024, a significant increase from £111.6m, buoyed by revenue growth from £1.5bn to £1.6bn.
Superdrug's remarks on the fiscal impact of Reeves' tax policies emerge shortly after rival Bodycare disclosed a deceleration in its º£½ÇÊÓƵ store expansion, attributing it to the government fostering "too much risk and uncertainty".
Bodycare further expressed that "the current climate of increased costs and legislation" is hampering its expansion ambitions.
Additionally, Bodycare cited government decisions regarding the winter fuel allowance and the ambiguity surrounding potential tax hikes, particularly National Insurance, as factors contributing to its Christmas sales falling short of expectations.
Cost-of-living crisis impacting customers
In a statement endorsed by the board, Superdrug stated: "2024 was another tough year for the retail sector and although inflation reduced throughout the year the legacy impact of higher prices and sustained higher interest rates, contributed to squeezing consumers' disposable income."
The ongoing cost-of-living crisis was a dominant theme throughout the year, leading to customers becoming more price-conscious and shopping around.
According to the British Retail Consortium, total high street footfall across the º£½ÇÊÓƵ was down on 2023, though the health and beauty sector was one of the few market groups to witness retail sales growth year on year.
Government decisions on areas such as the National Minimum Wage have exacerbated wage inflation and continue to exert pressure on retailers' operating margins, which the company aims to counterbalance through its cost efficiency and procurement activities.
Superdrug expecting 'challenging' future
Regarding its future, Superdrug noted: "The directors expect that the º£½ÇÊÓƵ retail environment will remain challenging and strongly competitive in 2025."
Consumer sentiment continues to be subdued, and with the household savings ratio at its highest in several years, retailers are having to work hard to attract customers' spend.
Simultaneously, legislative changes, particularly the increase in National Insurance contributions, continue to exert upward pressure on operating costs, further straining operating margins.
"However, the company's strategy is designed to counter these headwinds."
"The continued growth in sales and market share, which the company has delivered over the past few years, demonstrates the ongoing relevance of its customer offer across its broad beauty and healthcare product offering, both in-store and online."
"The company is cash generative and with a strong balance sheet [and] has a range of attractive inveStment opportunities open to it to further consolidate its market position and to drive further growth and operating efficiencies."
"The directors are confident that the strong trading performance in 2024 will continue into 2025 and beyond."
How chain compares to biggest rival Boots
Superdrug, trailing behind market leader Boots, operates under AS Watson Holdings, which is incorporated in the Cayman Islands and headquartered in Hong Kong.
According to separate financial records, Savers, another AS Watson Holdings entity, posted a 2024 revenue of £791.3m, up from £754.8m.
Its pre-tax profits also saw an uptick from £61.2m to £69.9m.
With Boots as its primary competitor, Superdrug ranks as the º£½ÇÊÓƵ's second-largest retailer in the health and beauty segment.
City AM last month reported that as Boots witnessed a profit surge, the high street pharmacy underwent a major restructuring, culminating in the closure of 334 stores by end of August 2024 and shelving plans for a potential initial public offering (IPO).
The downsizing came to light through documents submitted to Companies House by the Nottingham-based firm.
Boots reports its financial results across three entities: Boots º£½ÇÊÓƵ, The Boots Company plc, and Boots Management Services.
For the 12 months ending on 31 August 2024, Boots º£½ÇÊÓƵ reported a revenue of £7.3bn, an increase from the previous £7bn. Its pre-tax profit also saw a significant rise from £60m to £269m during the same period.
The Boots Company plc also experienced a growth in revenue, moving from £179m to £186m. However, its pre-tax profit took a hit, dropping from £122m to £31m.
Meanwhile, Boots Management Services saw a slight increase in revenue, going from £1.1bn to £1.16bn. Its pre-tax profit also rose from £55.6m to £61.7m.
