Boots upbeat despite UK sales catching a cold

Boots has suffered a dip in sales in its home market but its US-based owner hailed overall growth for the past year.

Boots is one of the most familiar names on the high street, with major stores such as this one on Edinburgh's Princes Street. Picture: Lisa Ferguson

The UK retail business saw sales fall 2.1 per cent over the fourth quarter to the end of August, after like-for-like pharmacy sales slipped 1 per cent.

Sales were impacted by lower volumes and a fall in NHS funding, as Boots struggled amid “challenging” retail conditions.

Parent company Walgreens Boots Alliance (WBA) saw its group annual sales rise 4.1 per cent to $136.9 billion (£106.7bn) as it was buoyed by a strong fourth quarter which beat expectations. Sales for the three months to 31 August nudged up 1.5 per cent to $34bn.

The retailer has already warned that some sites may need to close, particularly where there is nearby duplication. Picture: Lisa Ferguson

Risk

In July, Boots confirmed plans to shut some 200 locations over the next 18 months, placing thousands of jobs at risk.

Seb James, UK managing director, said the store closures would primarily focus on local pharmacy branches in areas where it has other stores nearby.

The US retail pharmacy division posted a 2.1 per cent hike in sales to $26bn in the latest three-month period as the volume of prescriptions increased against the same period in 2018.

However, the group was pressurised by falling international sales, which fell 6.3 per cent to $2.7bn as the business was weighed down by currency weakness.

Pleased

Stefano Pessina, executive vice chairman and chief executive of WBA, said: “We are pleased to report fiscal 2019 results in line with our previously stated guidance despite a challenging operating environment.

“We are also making progress on our four strategic priorities, which we remain confident are positioning us to deliver long-term growth.”

Boots said it had maintained its market share as high street competitors also saw sales come under pressure.

James said: "I am pleased with the progress that we have made in the re-boot of one of Britain's best-loved retailers. Our new stores are trading well and the work that we have done in reinvigorating our beauty and digital businesses is bearing encouraging early fruit.

"Nevertheless we are aware that this is a journey and that market headwinds have been strong and look likely to remain so for some time. Though we have declined in like-for like terms this year, I am glad that we have retained share across the board and grown significant share in beauty and pleased with the progress we’re making to digitise our pharmacy offer."He added: "Boots is one of the strongest retailers in the UK right now, not just in terms of its financial position, but, much more importantly, in terms of the mutual care and love that it shares with its customers."

US owner of Boots warns of store closures