Boots continued its recovery during the last quarter as the easing of Covid-19 restrictions boosted footfall in its stores, whilst it still benefitted from the recent investment in its online activities.
Over the 13 weeks to 31 August, Boots saw like-for-like retail sales jump 15% after suffering significant declines last year when its high street and travel sites were impacted by lockdowns, and shoppers turned to supermarkets for their health & beauty needs.
The group highlighted that footfall across its stores was up 35% versus the prior year, although online remained popular with sales more than double versus pre-Covid levels.
After closing hundreds of underperforming stores, Boots has been investing heavily to make its remaining sites more attractive to shoppers and combat the explosion of online rivals in the health & beauty sector.
The company rolled out 30 new beauty halls in stores over the year, with 100 halls now across the UK. Boots has also introduced 44 new beauty brands over the last 12 months and is now selling over 500 such brands in-store and online, including MAC, NARS, Anastasia Beverly Hills, Fenty Beauty, and Kylie Cosmetics. The retailer claimed yesterday that it now has a 40% share for both the premium make-up and skincare markets.
Meanwhile, like-for-like pharmacy sales increased 11.4%, supported by demand for its healthcare services which have been expanded significantly in recent months.
Sebastian James, Managing Director of Boots stated that the robust growth in both healthcare and beauty meant the retailer was “now ideally placed to seize new opportunities” in the next financial year.
He added: “We have responded to the fundamental and permanent shifts in both the retail and healthcare landscapes with a significant transformation of our business, introducing new products and services and investing in our digital capability and store portfolio.
“We are furthering our position as the UK’s leading health and beauty retailer and it is pleasing to see both our sales and market share growing.”
The wider Walgreens Boots Alliance group saw adjusted operating profit from continuing operations increase by 22.9% to $1.2bn. This reflected gross profit growth across its pharmacy and retail operation in the US and higher International sales and profitability due to the recovery in the UK.
WBA’s total fourth-quarter sales from continuing operations increased 12.8% to $34.3bn. Sales in the US grew 6.6% to $28.8bn, whilst the International division jumped 61.8% to $5.5bn, buoyed by the company’s wholesale joint venture in Germany and the uplift in the UK.
For the year as a whole, WBA’s sales increased 8.6% to $132.5bn with adjusted operating profits up 8.2% to $5.1bn.
Chief Executive Officer Roz Brewer said: “Our fourth quarter and fiscal year results exceeded expectations, driven by strong performance in our core business.
“Comparable US pharmacy and retail sales both saw robust growth and recovery continued in our UK business as Covid-19 restrictions eased in the quarter. I remain extremely proud of our team members’ unwavering commitment to meeting the needs of our patients, customers and communities. The role of the pharmacist and local pharmacy is now more vital than ever.”
NAM Implications:
- Boots clearly on the way back…
- Key issue is whether you are getting your fair share of investment and return.
- Meanwhile, any improvement in WBA/Boots is an incentive for Amazon to optimise the party…
