Boots reported increased footfall at its centre stores in Q4

An ongoing turnaround at Boots has been boosted by an uptick in footfall at its city centre stores and travel outlets at airports and train stations as consumers prepared for summer holidays.

Like-for-like sales in fourth quarter ended 31 August 2022 increased 15.2%, which was slower than Q3 growth of 24%, 22% in the second quarter and 16.3% in the first three months of the financial year.

However, retail sales at the high street chemist chain are now back above pre-pandemic levels, with footfall improving by about 20%.

It’s beauty proposition made a particularly strong contribution to the Q4 performance as rocketing demand for suncare products throughout a British heatwave and a return of international travel helped with “notable market share gains” in personal care.

Boots’ own-brand Soltan range enjoyed its biggest week in suncare sales since 2013, with the category recording a year-on-year increase of more than 150%.

Online sales also continued to grow in the period, with digital sales now accounting for 11% of the total in the quarter versus just 6% pre-pandemic.

Retail healthcare sales were up almost 14% in the quarter, driven by continued investment in own-label healthcare ranges, including the launch of the chain’s first erectile dysfunction treatment.

However, pharmacy sales fell 6.9% year on year as demand for Covid services such as vaccines.

Boots UK MD Sebastian James called the results “encouraging”.

“I am especially happy to see more and more customers choosing Boots over others and our market share rising as a result,” he added. “In addition, I am pleased with the progress we are making in quickly introducing new, trending beauty brands, our healthcare services supporting the NHS and, of course, with our offer which is now double its pre-pandemic levels.

“We know that cost of living will be a big consideration for everybody and we have frozen 1,500 prices, launched Boots everyday with excellent products for as little as 50p, and massively expanded our Price Advantage scheme.”

GlobalData said Boots’ focus on providing value-for-money had paid off as the cost-of-living crisis intensified.

Senior consumer analyst Lia Neophytou added: “It is becoming increasingly difficult to attract and retain customers as the cost-of-living crisis intensifies. However, Boots’ strategy, combined with the essential status of most health & beauty categories, have enabled its retail sales to exceed pre-pandemic levels.

“Despite this encouraging set of results, the following quarter will be a more challenging period for Boots as the cost-of-living crisis intensifies further and discretionary income shrinks. The pressure on consumers’ budgets will coerce them to continually re-evaluate their spend and seek the best deals possible, highlighting the need for Boots to continually emphasise its value-for-money offerings and deals throughout the winter.”

Boots owner Walgreens Boots Alliance did not provide an update on its future plans for the UK chain following the abandoned sales process earlier this year.

Annual profits at the US group fell 41% to $1.4bn as a results of a $783m impairment charge at Boots UK, which also led to a loss of $822m in the fourth quarter.

Group revenues in the fourth quarter fell 5.3% to $32.4bnm while annual sales nudged up 0.1% to $132.7bn.