The chain is working on presenting its best face to high streets as well as online. Its boss tells why, despite sales ravaged by lockdown, the future is smelling sweet
The beauty market has had a makeover during the pandemic. Department stores are losing what remaining influence they have, and social media is increasingly the place to try out and buy skincare, cosmetics and fragrance.
With TikTok and Instagram now holding far more sway than the white-coated beauty counter assistants, it is perhaps no surprise that Boots is up for sale, Debenhams – once one of the leading beauty retailers in the UK – has left the high street and House of Fraser and John Lewis are in retreat.
Against all that, Peter Macnab is trying to lead a high street fightback. The boss of the Superdrug and Savers chains is on a mission to knit bricks-and-mortar stores together with the online world.
The 64-year-old Scot started his career at now-defunct supermarket chain Safeway in 1972, carrying paper bags of shopping out to customers’ cars. Today he’s overseeing a digital integration project that allows Superdrug to offer two-hour delivery for online orders or pick-up in store within 30 minutes.
Last month the 800-store chain introduced the “endless aisle” – where shoppers who can’t find what they want in the shop can order it at the till for home delivery. Macnab calls it “o and o” – online and offline working together.
“People are worried that o and o is diluting offline but it isn’t,” says Macnab, as he weaves around the Superdrug in Northamptonshire’s Rushden Lakes shopping centre. “The online shopper spends more with us if she’s also offline than if she’s online-only.”
This co-ordination has proved essential given that shoppers have not returned to the high street in the same numbers as before the pandemic. Macnab says the cancellation of many Christmas parties means customers
Family married with two adult children plus two grandchildren.
Education Victoria Drive secondary school, Scotstoun, Glasgow.
Pay “We are a private company.” The highest-paid director received £1.45m in pay and perks last year.
Last holiday A family trip to Mallorca: “It was wonderful.”
Best advice you’ve been given “Listen to your customer. This is something I’ve tried to carry through all stages of my retail career. I still spend much of my time travelling the country, going into our stores and walking the shop floors – it is by speaking to customers that we’re able to react, evolve and succeed.”
Biggest career mistake “I left AS Watson in 2005 for a few years.”
Word he overuses “That’s a difficult question, but I hope it’s thank you. I think it’s so important to pause, recognise and thank. Thinking about it though, those two words can never really be overused.”
How he relaxes Spending time with the grandchildren.
are also less likely to be buying mascara and lipstick, but he still expects a “good Christmas”.
While some businesses are scaling back, discount chain Savers is planning to open 50 more shops. Superdrug is to open 15 mainly larger stores, where it can offer more services to draw in trade.
Macnab says he’s “not depressed about high streets”, but thinks the government must support retailers by doing something about “incredibly high” business rates. “We have stores which pay more rates than rent and that was never the intention. This is a really urgent situation. Many businesses, not just small independent businesses, need to see a much fairer application of rates.”
He is not a fan of an online sales tax – a possibility the government is exploring. Macnab says this would just be passed on to consumers. Instead, he would prefer much more frequent revaluations of business rates, potentially every year compared with the current five years.
Macnab’s other tactic to draw in punters is an array of services that can’t be found online. Superdrug offers ear piercing in more than 200 stores, has 300 nail bars, and is experimenting with barbers or hairdressers in several locations. It has also trained 200 pharmacists to offer free consultations on skin conditions such as acne – the kind of service it may be difficult to access via a GP.
During the pandemic, Superdrug’s 100 nurses have been offering vaccinations. The business has jabbed more than 200,000 people and was the first high street chain to offer boosters.
Nevertheless, the pandemic has taken its toll on the beauty empire, which is owned by Hong Kong conglomerate CK Hutchison Holdings. Sales were down 15% last year – to £1.1bn from £1.3bn a year – and Superdrug permanently closed a net 13 stores. Pre-tax profits fell by 79% to £18.8m. At Savers, sales fell 6% to £536m while pre-tax profits were down 20% to £40.3m.
Supply chain woes and fears about the Omicron variant have hit overall trade again this year, but there are some bright spots: fragrance sales are up more than 10% on last year, as shoppers who couldn’t sniff out their favourite scent during the 2020 lockdown returned in droves.
Superdrug is gunning for Debenhams’ £800m share of the beauty market, a chunk of which is up for grabs since it quit the high street under new owner Boohoo. “That’s a lot of business to go by the way,” says Macnab. “Some will have gone online but when it comes to Christmas, people trust going into stores more. That is an opportunity for us.”
Macnab’s near 50 years of shop floor experience, including decades in beauty retail, have helped him marshal the fightback. He joined Savers in 1997, when it had just 24 stores, and was on the management team when it was bought out by Hong Kong retailer AS Watson in 2000. He took the helm at Savers in 2011, helping the upstart chain gain a big chunk of market share before adding Superdrug to his duties three years later.
Skipping around the Rushden Lakes store, Macnab clearly delights in finding ideas that will draw in punters and fill gaps in the market that bigger rivals have missed.
Every store has Facebook and TikTok feeds that anyone can post on, so staff can talk to customers about deals or products that will appeal locally.
Macnab’s highlights are Japanese skincare brand Hada Labo – which Superdrug stocks exclusively in the UK – and own-brand skincare label B, which aims to create creams that compare well to much more expensive versions.
“What I enjoy is the effect beauty products have on people. It is amazing how they lift the spirits,” he says.
Source: Read Full Article