Find out who made the grade over the past year in Retail Week’s annual scrutiny of the UK’s top retailers. By Retail Knowledge Bank senior partner Robert Clark

Holland & Barrett is yet again the most profitable major retailer in the UK, achieving 24 per cent operating margin, although this was below the remarkable 30.2 per cent margin of the year before. River Island remains in second place and Topps Tiles is holding firm in third. Which again poses the question, what might Topps’ margin be if it managed to improve its Achilles heel of modest sales densities?

There are only three new entrants in the top 20 most profitable retailers this time. These are Mike Ashley’s newly floated Sports Direct International – although it has been underperforming in subsequent periods – Harrods, where operating profit doubled, partly aided by an exceptional pension fund-related gain of£16 million, and Phones 4U, whose operating profits improved more than three times in the year John Caudwell sold the business to private equity interests. There remains, therefore, a strong consistency among the UK’s most profitable retailers, with no less than 17 of last year’s 20 making a repeat appearance.

At the other end of the scale, the increasingly competitive nature of retailing led to some companies making substantial losses. Virgin Retail again made an operating loss of 25 per cent of sales, ahead of its disposal of Virgin Megastores for£1 to Zavvi, a management buy-out team. The restructuring of troubled Jessops took its toll, generating a 20 per cent negative margin. Somerfield and MFI both recorded losses approaching 10 per cent of sales as they, too, felt the effects of corporate change and, in the case of MFI, faltering turnover levels.