Healthy profits make food store UK's No 1

The firm, whose public face is 80s pop idol turned gardening guru Kim Wilde, beat retail giants such as Tesco - even though the supermarket sold nearly 30 billion worth of goods in the last financial year.

Fashion chain River Island was the second most profitable, while Sir Philip Green's Arcadia Group stores - which include Top Shop, Dorothy Perkins, Burton and Miss Selfridge - was also in the top five.

The league table, compiled by Retail Week, reveals how big retailers often operate on slimmer profit margins than more specialist high street chains which can charge higher prices because of less competition.

Peter Aldis, managing director of Holland and Barrett, defended the firm's 30.2 per cent profit margin and said the firm had benefited from being bought over by US vitamin giant NBTY.

He said: "We have tried to concentrate on products which are unique to us and to ensure that our staff are fully knowledgeable about all the products we sell.

"We are taking risks ourselves in the research that we carry out, but enjoying the profits that come with that."

But he insisted he was not profiteering by charging customers high prices. "We strive to be extremely competitive," he said.

Clothing and household stores made up the majority of the top five most profitable chains.

River Island, which came second, had a profit margin of 22.8 per cent, while Britain's DIY obsession sent Topps Tiles into third place with a profit margin of 21.3 per cent.

Arcadia notched up an operating margin of 18.8 per cent, despite a slump in profits from 252 million to 202 million in the year to September.

And the top five is rounded out with Irish retail chain Dunnes Stores, which operates 152 stores in Britain and Ireland, including three stores in Scotland.

The firm, owned by a family trust, notched up a profit margin of 16.9 per cent in its latest results.

Robert Clark, of Retail Week, said: "The generally tougher trading conditions of 2005 are reflected in a slight decrease in profit margins achieved last year.

"There is, however, a remarkable degree of consistency among the UK's most profitable retailers, with no fewer than 19 of last year's 25 most profitable making the grade again this time."

Debenhams came sixth in the survey, with Next at seventh followed by Carpetright and footwear chain Clarks.

• Holland & Barrett has 500 stores in the UK and has benefited from a growing interest in all things organic and homeopathic.

H&B specialises in health foods, food supplements and vitamins. It is extremely popular with vegans and vegetarians and made a profit of 62.6 million from its UK shops on a turnover of 257 million.

River Island: A family firm; founder Bernard Lewis, who started his first shop in 1948, is now chairman in his eighties. Has 197 shops worldwide and made 102.3m profit on 595.3m turnover.

Topps Tiles: Opened first shop in Manchester in 1963. Now more than 200 branches across UK, as well as some in Holland. The firm's turnover in 2005 was 173m and profits were 39.2m.

Arcadia Group: Sir Philip Green's fashion firm includes Top Shop - which recently signed Kate Moss as its fashion face - Burton and Miss Selfridge. Made 202m from 2,000 UK shops.

Dunnes Stores: Owned by an Irish family trust, with 152 stores. The 36 shops in the UK and Northern Ireland include three in Scotland. Profits in 2005 on a turnover of 231m were 63m.