The Fragrance Shop has reported that operating profit rose by 37.8% in its full year, driven by its strong value proposition.

For the year to March 31, operating profit rose from £5.1m to £7.1m, while pre-tax profit rose from £5m to £7m. Sales rose from £55.4m to £57.2m.

The Fragrance Shop chief executive Sanjay Vadera said the retailer’s “strong value proposition is a big draw for customers”. He added that its customer service and broad range of products, including new launches, also attracted customers.

The 124-store retailer is performing well in the current year, with like-for-like sales up 12.2% in the year to date.

Vadera said: “Despite discretionary spend reducing, people don’t want to see their standards of living fall, and they want to feel confident every penny they spend is good value in terms of price and the experience that goes along with it.”

He said customers are shopping around more, making careful comparisons of offers available at different retailers before purchasing.

The profit growth has meant the retailer has paid back all its outstanding debt in full and now has cash for growth. It is looking at opening about 20 stores and is investing in its computer systems and online operations.

The Fragrance Shop will also trial a new store design in Cardiff later this year, giving it a bigger footprint and larger product range including niche luxury brands not  available at the rest of the chain.

Vadera said sales had not been impacted by rival The Perfume Shop’s launch of a loyalty scheme, or “any other competitor activity”. He said: “Our customers tell us the main factor affecting their choice is value for money, so we will focus on investing in direct value.”