UK retailers Superdrug and Next ease financial stress with price freeze and cuts
25 Mar 2024 --- Some UK retailers are enforcing price freezes and cuts to help consumers cope with the rising cost of living.
Superdrug froze prices for 5,000 makeup products while Next reduced prices after larger profits than predicted, despite higher costs for the company caused by the Red Sea crisis and its impact on supply chain disruption.
Superdrug makeup freeze
Prices for popular makeup brands sold at Superdrug, such as Rimmel, ELF and Maybelline, will stay the same until this summer. As of February, the retailer said it held a 40.5% market share in mass-market cosmetics, its highest market share in ten years. The company also said Studio London is now its fastest-growing own-brand range.
Megan Potter, trading director at Superdrug, says: “We are thrilled to become the number one retailer for cosmetics. Our commitment to offering great quality and affordability to our customers is at the heart of everything that we do.”
Superdrug has an ongoing commitment to "support shoppers through their financial struggle."“We pride ourselves on putting our customers first, and we’re committed to making cosmetics more affordable for our shoppers and supporting them with the rising cost of living.”
Superdrug previously slashed prices on over 150 of its own-brand items — including body care, makeup and baby toiletries. It said it is committed to “making sure it is offering the best price” amid the “cost-of-living crisis.”
The retailer also recently removed 20%, the equivalent of VAT, on its own-brand dental range, ProCare, to help consumers’ wallets.
Next records bumper profits
UK fashion and homeware retailer Next slashes prices for customers by 2% due to lower buying costs for goods, with reductions to continue by another 0.5% in the six months to next January.
“On the face of it, the consumer environment looks more benign than it has for a number of years, albeit there are some significant uncertainties,” says Next.
Next reported a 5% jump in annual profit to £918 million (US$1.16 billion). That was better than expected by analysts and despite a one-time charge of £20 million (US$23 million) due to the Red Sea crisis.
The disruption was caused by attacks on vessels in the Red Sea area, causing reduced traffic through the Suez Canal. Instead, ships are diverted around the Cape of Good Hope to overcome the hindrance.
That led to delays of seven to ten days on some goods from the Far East, but Next explains that its product teams “have adjusted the timing of their contract bookings to account for this delay. Higher freight costs have been factored into our prices going forward, but we still anticipate that our prices will fall.”
The retailer adds that it has been “a long time since we started a year in a more positive frame of mind” and is entering a “new era.”
By Sabine Waldeck
