British chain Superdrug said today it was spending £75m (€109m) on expanding in the UK in a fresh sign of intensifying rivalry among health and beauty chains on the high street.
The UK’s second-largest health and beauty retailer said the move would create 400 jobs at 40 new stores and lift its trading space by 5% this year.
The expansion programme is set to continue over coming years as its owners - Hong Kong-based AS Watson group – saw the potential for more than 1,000 outlets of Superdrug by 2009.
This represents a 40% increase on the 700 branches of Superdrug currently trading in the UK.
The move will increase the pressure on market leader Boots and coincides with the release of its annual results today. Analysts expect Boots to say that profits have fallen to £475m (€690.9m) because of the consumer spending slowdown and the need to modernise its stores.
Euan Sutherland, chief operating officer at Superdrug, said the UK was a “significant growth market” despite retail experts raising fears that a recent push by supermarket giants such as Asda and Tesco into the health and beauty sector would eat into the sales of established chains.
The first new Superdrug store opened in Stornaway in the Scottish Western Isles last week and others are planned in cities including Norwich, Glasgow and Edinburgh.
Superdrug is also investing in rejuvenating its brand and has appointed advertising agency Euro RSCG London to make it more “appealing and relevant” to customers through a marketing campaign due to start later this year.
Mr Sutherland said: “Our customers tell us that they love our low prices and enjoy the whole Superdrug experience so these expansion plans mean that more people than ever will be able to shop at their local, new-look Superdrug.”