Following today’s release of Holland and Barrett’s figures for the 52 weeks ending 30th September 2023; Tash Van Boxel, Retail Analyst at GlobalData, a leading data and analytics company, offers her view: “Holland & Barrett benefited from the essential nature of the health & beauty sector throughout the cost-of-living crisis, as sales rose 10.0% to £589.9m in FY2022/23 to September 2023. This robust result can be attributed to UK retail sales growth, up 12.7% to £445.8m in FY2022/23, as wholesale and franchises declined. While the inflationary environment boosted this performance, Holland & Barrett benefited from increased footfall. The health & wellness specialist enticed shoppers through improved and expanded product ranges, supported by its loyalty scheme ‘Rewards for Life’, which strengthened customer retention. Holland & Barret has been investing in its store estate, opening and renovating over 200 stores as it grew its presence across the UK. Renovations in conjunction with store opening are vital for the health & beauty specialist, as it will ensure that growth is sustainable in the coming years. However, due to high administrative costs from warehouse closures and stock losses, EBITDA only reached £6.1m in the reporting period and improving profit margins should be a focus in this next financial year.
“Holland & Barrett’s online presence accounts for a fifth of business, with online sales reaching £119.1m in FY2022/23 (up 5.5% on the previous year). Though this is below the performance of the online channel during the pandemic, Holland & Barret has retained a sizeable proportion of its online shopper base and is an area it must continue to grow given that online penetration for the UK health & beauty market is forecast to reach almost 22% by 2028 (up from 13% in 2019). Its wellness hub strengthened its online presence, providing consumers with expert tips and product recommendations based on health concerns and free consultations over the phone. Pointing consumers to this can help bolster conversion rates as shoppers can more easily navigate to the products they need and enable Holland & Barrett to compete with online pharmacies and pureplays.
“Holland & Barrett is on course to maintain this momentum into the next financial year, as UK sales have risen 11% in the eight months to May 2024, driven by the growing popularity of vitamins and supplements. The other health market, which includes vitamins & supplements, is forecast to grow 37.2% between 2023 and 2028, according to GlobalData, indicating that consumers’ investment in alternative medication is rising. Moreover, Holland & Barrett’s café concession, which it trialled in November 2023 in Birmingham and extended to a second location in London in July 2024, is a wise move towards experiential shopping. ‘Drinks with Benefits’ offers made-to-order drinks in its store, ranging from traditional hot beverages to infused teas and vitamin-blended coffees, setting itself apart from traditional coffee shops and other health & beauty retailers. Holland & Barrett should expand its café locations across more of London and to cities including, Manchester and Edinburgh, highlighting the science-backed benefits of its drinks, as this will help to distinguish it from its rivals in the leisure and the health & beauty sector.”
