Why Holland & Barrett has seen 27.5% online sales growth in a year
The Holland & Barrett group posted EBIDTA (earnings before interest, taxes, depreciation and amortisation) growth of 12.2% to £146m (€184.25m) on the UK’s government registrar of firm, Companies House, today.
It’s been a busy year for the company, which set itself the target of becoming a £1bn (€1.26bn) business by 2020.
Its franchise plans are a central part of this. The company currently has just over 100 franchise stores internationally.
However if a pending £20m (€25.44m) deal with Indian hospital chain Apollo Hospitals comes through, a further 1,000 stores will be added to this tally over the next five years.
Speaking with NutraIngredients, the company’s CFO Chris Keen said a key growth area alongside franchises was online sales.
Key facts
-Store sales grew by 7% - increasing from £480.972m to £449.643m
-Online sales grew by 27.5% - from £28.357m to £36.163m
-Franchises sales grew by 84.6% - from £9.002m to £16.617m
Holland & Barrett now has five different websites in the UK, Ireland, Holland, Belgium and UEA.
Through these as well as its two 2015-opened shop fronts on Tmall, the e-shopping outlet owned by Chinese internet giant Alibaba, its websites now serve 60 countries worldwide.
“Our websites are becoming more global than the stores,” Keen said.
Cash for clicks
Notably, mobile online sales grew by 127% in the last year.
“Surprisingly we haven’t seen any cannibalisation of stores sales – we believe that’s because we keep all the offers the same,” said Keen.
The company has been progressively opening new websites as it expands into more countries on the ground with new sites just launched in the BENELUX region, which is already bringing in €2,000 a week from "a standing start".
Meanwhile the Irish website grew by 32% last year.
The Irish store count grew from 47 to 50 stores last year and saw revenues increasing 5% to €30.9m.
This online and in-store growth as well as new overseas Scandinavian markets will now be served by a new 70,000ft² warehouse in Dublin.
On and offline
Keen said it was important to link up strategy online and on shelf.
“Our principle is everything is the same – the same offers, the same real-time updates.”
The nuts and bolts of this meant a £26m (€32.82m) investment in a global Oracle ATG Web Commerce platform, which means the company can offer uniform offers with loyalty cards.
Oracle claims its platforms enable companies to manage omnichannels, easily expand geographically and rapidly launch sites for new brands, markets and single-purpose campaigns.
The bigger picture
According to Euromonitor International data, other healthcare specialist retailers – which covers those selling healthcare products including supplements and hearing aid specialists – brought in sales of €9,786m in Western Europe in 2015.
Italy alone accounted for the vast majority of this (€3,646.2m), followed by Germany (€1,469.4m) and France (€1,000.1m).
