Boots sales recover as customers return to shops and travel resumes

Boots has benefited from shoppers returning to high streets and travelling more, boosting sales shortly after its US owner abandoned plans to sell the UK health and beauty retailer.

The chain reported an increase in like for like sales of 15.2 per cent in the three months to August 31, compared with a year earlier. That was despite pharmacy sales falling almost 7 per cent as demand slipped for Covid-19 services such as vaccines.

“We’ve seen people going on holiday again and a little bit of business travel as people go back to work up from really a very low base. What’s more encouraging is to see people coming back into town centres,” said Boots managing director Sebastian James.

He said inflationary pressure in the health and beauty market was not as severe as in other sectors, running at about 3.5 per cent. Boots locked the price of about 1,500 of its most popular items and launched a “Boots Everyday” range with some items starting at 50p.

“We get a little bit of the lipstick effect where the products we sell are an indulgence but they’re relatively inexpensive. People might not get a new outfit but they may get a new lipstick and that’s a benefit to us,” James said.

Boots UK was thrown into uncertainty this year after its owner, the US pharmacy chain Walgreens Boots Alliance, abandoned plans to sell the UK retailer, citing a downturn in financial markets.

The group did not provide an update on WBA’s plan for the future of Boots.

“We embarked on a process before the Ukrainian war, before the real bite of the cost of living crisis, not surprisingly, it’s not the right thing to do to push through a process when market conditions are so manifestly not right,” James said

“One day the time will be right. There’s no rush, we’re very happy to be owned by WBA,” he added.

Boots UK contributed to a drop in its parent company’s operating income for fiscal 2022 of 41 per cent from $2.3bn to $1.4bn as a result of a $783mn impairment charge.

WBA reported a drop in fourth-quarter sales of 5.3 per cent to $32.4bn. Its shares were up about 1.5 per cent in early trading on Thursday at about $32 per share.