Page 16 - Sphere No.18 (Feb 2007)

14 SPHERE
SUPERDRUG IS MAKING heads turn with a great look
and great figures. Positioning itself as Britain’s most
fashionable beauty and health retailer, it is performing
strongly in a market long dominated by a well-established
chain that is now also under pressure from supermarkets.
Superdrug has annual sales of GBP1.2 billion (HKD18.6
billion) in the UK and in 2006 a new store opened practi-
cally every week. By the end of the year it had 747 outlets
and this number is expected to reach 1,000 by 2009.
The chain was acquired byA.S.Watson in 2002 from Kru-
idvat Beheer. Since then, Superdrug has become a fashion-
led beauty retailer that responds rapidly to the latest mar-
ket trends. “In the past couple of years the pace of change
at Superdrug has really accelerated and there is clearly no
lack of imagination and innovation. It is definitely a story
we are following with interest,” says Tim Daneher, Editor
of Retail Week, the UK’s leading specialist magazine for the
retail sector.
Superdrug aims to be the first to stock the latest “must-
have” products at the best prices. It co-ordinates with the
big brands on launches and can have new products in all
its stores in just 36 hours. It has also achieved a number of
coups by securing exclusive agreements
to stock high profile new products such
as David Beckham’s fragrance.
“We have successfully
differentiated ourselves
from our main competitors. Superdrug is about beauty and
fashion, about having the latest cosmetics. It’s vibrant, co-
lourful and funky,” says Euan Sutherland, Chief Executive Of-
ficer of A.S.Watson (Health & Beauty) UK.
Historically, Superdrug appealed to teenagers because
it was trendy and cheap but these customers abandoned
the brand as they grew up. The new strategy means that
women who are interested in fashion stay loyal to the brand
whatever their age.The marketing focus is not about age, it’s
about attitude.
The chain is also building a campaigning reputation. In
2005, it campaigned successfully for a reduction in Value
AddedTax (VAT) on condoms. In the summer of 2006, it ran
its SAFE campaign to boost awareness about skin cancer
and raise funds for research. It is also lobbying the UK gov-
ernment to reduce VAT on children’s sun protection prod-
ucts and has launched the UK’s first high street mole clinics
to aid early detection of skin cancers.
In August 2005, Superdrug introduced its True Spirit
range of fashion jewellery and in October 2006 launched
a new concept store with a pink frontage. If success-
ful, this will be the prototype for the next generation
of Superdrug stores. The store employs beauty special-
ists trained by the London College of Fashion to provide
treatments such as manicures.
With so much to offer, Superdrug’s star is clearly in the
ascendant.
HIGH STREET SUPERSTAR
Beautiful Brits
If 3 is setting the pace in mobile communications, an-
other division of HWL – A.S. Watson (ASW) – is mak-
ing an impact on the British retail scene. In six years
it has built a strong portfolio in the health and beauty
sector and now has around 1,350 high street stores.
“ASW started its UK investment in 2000 when it first
acquired a local retail chain called Savers,” said ASW
Group Managing Director Dominic Lai. “The Group
decided to go into Europe because it wanted to di-
versify its geographical portfolio following the Asian
economic downturn. At that time, ASW’s entire busi-
nesses were in Asia.”
Two years later, ASW expanded its UK operation
with the purchase of Superdrug. This chain has been
successfully repositioned as the UK’s leading fashion-
led health and beauty retailer (see box below). In a clear
vote of confidence in the potential of the UK health
and beauty market, ASW has announced a GBP132
million investment in a new distribution centre to