Superdrug boss Peter Macnab says corporate tax rates need reform

Whether you want waterproof mascara, luminous eyeshadow or mosquito repellent, Peter Macnab can instantly tell you the product you need. The Superdrug boss has 52 years’ experience in retail, so he’s well qualified to give recommendations.

But as we speak in a busy Superdrug store on the outskirts of north London on the eve of the chain’s 60th anniversary party, it’s clear that Macnab would also like to share some of his wisdom with the new government.

Superdrug has more than 780 stores in the UK and Ireland, less than half the number of rival Boots. But Macnab believes Superdrug is set to fill the gap left by the closure of high street pharmacies. A record 432 will close in 2023.

In addition, many people have difficulty getting appointments with their GP or dentist.

“Pharmacists are experts at what they do and we want to make better use of them,” he said. He is keen to talk to ministers about ways to expand the role of these professionals.

Last week, the Government took action on an issue that is of great concern to Macnab: violence and assault against retail employees. As confirmed in the King’s speech, attacking or abusing a retail employee will become a separate offence.

The problem of attacks and theft has been such that the group has invested in headsets and body cameras to protect its workers. While Macnab believes that a “great service” goes a long way to deterring would-be thieves, theft is a huge problem.

Shoplifters come in the form of individuals who steal items for personal use or criminal gangs who break in and sweep products such as fragrances, razors and electric toothbrushes off shelves.

“In the end, it is the population that bears the brunt, since it is included in the sale price,” he said.

But the King’s speech contained no mention of sales tax reform. Like other retail bosses, Macnab, 67, sees such change as essential to creating “vibrant” shopping centres across the country.

“Please fix the tariffs. It’s an unfair burden on retail,” he said, referring to brick-and-mortar stores.

On her wish list, she also wants to see the removal of VAT on basic items such as sunscreen and toothpaste. Superdrug has been campaigning for this since the “tampon tax” was scrapped a few years ago.

But it is not just about Westminster. Big changes can be made at local level too. He wants councils to help reduce the high and punitive parking charges that deter shoppers from visiting high streets.

The strict restrictions on hiring and funding for apprenticeships are also “extremely difficult.” “We’re opening stores and we want to be able to hire people for them,” she said.

Macnab’s career shows that academic qualifications are not the only criterion for success. After a weekend job at Safeway supermarket paying 19.5p an hour, Macnab spent almost two decades at Savers, which has more than 500 stores in the UK. This included three years in the top job.

In 2014, it took over Superdrug, which, like Savers, is ultimately owned by Li Ka-Shing, Hong Kong’s richest billionaire.

Retail remains one of the sectors where you can work your way up from the shop floor to the boardroom, he said, adding: “You don’t have to have been to Eton.”

His nine years at the helm have been tumultuous. Covid-19 forced the company to ramp up online operations before the cost of living crisis hit consumers. But while shoppers have felt the impact over the past two years, sales have been resilient. In 2023, they rose 12% to £1.53bn. Profits soared 43% from £78m to £111.6m.

This is due to successes on several fronts. Women make up the majority of Superdrug’s customers and the company already helps them with issues such as getting contraceptives in an easy and shame-free way. Men and women are also calling Superdrug stores to buy weight loss drugs, which have seen their popularity rise.

There have been “endless enquiries” for the treatments, which start at £195 for Novo Nordisk’s Wegovy and £215 for Eli Lilly’s Mounjaro for a four-week course of treatment. Both are out of stock on the website. But the chemist insists it is not a case of throwing medicines away like candy.

Niamh McMillan, Superdrug’s principal pharmacist, said: “The weight loss service is only available to those who have an eligible BMI and we have a strict screening process both in our health clinics and online so that only eligible people can access the service.”

All are delivered only after customers complete a lengthy questionnaire, either in person or online.

Vaccines for travelers are also in high demand as people take more adventurous trips post-Covid.

Macnab is also keen to win over beauty consumers, with a plan to invest in own-brand products to compete with Boots. The job of an innovation team in Croydon is to come up with ideas for the product range.

One such line is his colourful Studio London brand, promoted by Peter Andre’s daughter Princess.

Young people on social media are full of praise, saying the range of products, which mostly cost less than £10, rival brands costing three times as much. These ranges are “a real point of difference” and the way the company hopes to boost beauty sales, according to Macnab.

There are signs of a “lipstick effect” where consumers are snapping up affordable products. Skincare products in particular are disappearing from shelves, while fragrances – including those by singer Sabrina Carpenter, who is supporting Taylor Swift on her world tour – are also doing well. Many shops offer services ranging from ear piercing and eyebrow threading and waxing to nail polishing. Demand for these products is booming again after a post-pandemic period where consumers got used to doing it themselves.

The emphasis on value is in Superdrug’s DNA. The chain has always had roots in the discount sector, Macnab said. The Goldstein brothers opened it as a budget supermarket in 1964 in Putney, London. Plans are afoot to open 25 stores this year, including some of the largest in its history.

Another item on Macnab’s to-do list is adapting a High Street business to the modern era and this takes up much of his attention. One of his top priorities is ensuring the business works both online and offline.

Despite all the challenges, Macnab remains enthusiastic about the sector. What advice would you give to those who want to progress in it?

“Don’t be afraid of hard work.”