Superdrug owner AS Watson bets on agility and UK investment amid 'volatile' global market

AS Watson is positioning itself for resilience in an increasingly volatile global market, with group leadership emphasising agility, consumer trust and strategic investment in the UK as key priorities for growth.

Speaking at an intimate 185th anniversary roundtable, CEO Malina Ngai said the company is focused on "building a company for stability" despite mounting geopolitical and economic uncertainty.

With 140,000 colleagues worldwide, the group aims to respond quickly to changing market conditions while keeping operations aligned across regions.

"We know the world has become uncertain and volatile," Ngai said. "What we are trying to do is be very agile."

A central part of that strategy is ensuring the business can "move as one" across every market and function. She added that the group is increasingly investing in data science and generative AI to help teams operate more efficiently.

However, Ngai noted that conditions in the Middle East remain challenging. She said consumer confidence has weakened significantly following recent geopolitical conflict, leading to lower retail traffic across the company’s store network in the region.

"We have 36 stores in the Middle East across four countries and consumer sentiment has really gone down a lot," Ngai said.

The company also highlighted that rising fuel prices are having an impact beyond increased logistics costs.

"Increasing fuel prices are not just a logistics cost, but also have an impact on consumer sentiment," Ngai emphasised. "In the UK particularly, consumers are becoming more conscious about what they spend."

AS Watson is closely monitoring spending patterns and trying to minimise price increases for customers despite ongoing disruption and higher operating costs.

Despite pressure on consumer spending, the UK continues to be viewed internally as one of AS Watson’s most important investment markets.

"The UK market is a very important strategic investment for us," Ngai shared.

Through its three core brands in the region - Superdrug, The Perfume Shop and Savers - the group aims to serve customers across all income levels amid the ongoing cost-of-living squeeze.

Although consumers are spending more cautiously, Ngai said shoppers continue to seek out trusted retailers that offer strong value, promotions and affordability.

Echoing this sentiment, Superdrug boss Peter MacNab said: "From the very beginning, we have stood for accessible health and beauty, helping customers find what they need, discover what they love and feel confident they are getting value - and we continue to stand by those values.

"That’s how we stand firm in a changing market: by staying close to customers, investing in our stores and people, and maintaining a continued focus on growth with confidence.

"Our ambition this year is clear - we want to lead the way in accessible health and beauty. For us, that means delivering growth by opening stores, creating jobs, supporting our people, bringing more innovation to the industry, and giving customers more reasons to choose Superdrug."

AS Watson now has 27 million loyalty members in the UK, which remains the company’s largest market in Europe, ahead of the Netherlands, Germany and Poland.

Established in 1841, AS Watson began as the Hong Kong Dispensary - the city’s first drugstore offering Western medicine - and has since become a major subsidiary of CK Hutchison, with a portfolio of global health and beauty retailers.

The company entered the UK market in 2000 with its acquisition of Savers, followed by a number of other acquisitions, including Superdrug and The Perfume Shop.