Holland & Barrett sinks further into the red despite sales surge

Increased footfall helped Holland & Barrett grow its sales past the £800m mark during its latest financial year but a rise in costs saw it sink further into the red.

The Nuneaton-headquartered health foods store chain has reported a revenue of £806.1m for the year to September 30, 2023, up from the £725.3m it posted for its prior 12 months.

Holland & Barrett, which is owned by investment business LetterOne, also saw its pre-tax loss widen from £59.6m to £65.3m in the year, according to newly-filed results with Companies House.

During the year the average number of people employed by Holland & Barrett increased from 7,993 to 8,698.

Costs and competition hit Holland & Barrett

A statement signed off by the board said: “[The] sales performance reflects the continued increase in retail footfall in the UK and Netherlands plus investment in our transformation plan driven by new product offering particularly in food and more awareness through marketing campaigns.”

Distribution and operating costs fell from £280.1m to £253m but administrative expenses, including exceptional items, rose from £168.8m to £244.8m.

Holland & Barrett said the rise was driven by variable costs supporting top line growth and increased investment in its transformation plan.

Exceptional costs, which fell from £25.1m to £13.8m, were driven by stock write offs, store and warehouse closures and restructuring costs.

Holland & Barrett added: “The health store market is highly fragmented globally. There are estimated to be more than 1,000 independent health stores operating in the UK alone.

“Furthermore, there is increasing competition from the national supermarket chains and other retailers such as chemists, drugstores and internet traders.

“The group has differentiated itself from its mass market competititors by developing a specialist reputation, whilst at the same time offering high quality products at good value.

Holland & Barrett was founded in 1870 by Major Holland and Alfred Barrett and now has more than 1,600 locations across 19 countries.