High street turmoil impacts Boots sales

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High street turmoil impacts Boots sales
// Boots sales slide 2.1% in the UK amid high street turmoil
// However, its US-based parent company Walgreens Boots Alliance has enjoyed overall growth
// UK sales were hit by lower volumes, a decrease in NHS funding, and “challenging” retail conditions

Boots has posted sliding sales in the UK as its US-based parent company hailed overall growth for the past year.

The British health and beauty retailer saw fourth quarter sales decline by 2.1 per cent year-on-year in the UK, after like-for-like pharmacy sales slipped one per cent.

Boots’ sales were hit by lower volumes, a decrease in NHS funding, and “challenging” retail conditions.

Meanwhile, US-based Walgreens Boots Alliance saw overall group sales jump 4.1 per cent to $136.9 billion (£106.7 billion) for the year, as it was buoyed by a strong fourth quarter which surpassed expectations.


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Sales for the three-month period to August 31 increased by 1.5 per cent to $34 billion (£26.5 billion), but operating profits slumped by 20.5 per cent to $5 billion (£3.9 billion).

Walgreens Boots Alliance’s overall performance was boosted by a 2.1 per cent rise in US pharmacy sales to $26 billion (£20.2 billion) for the quarter, as the volume of prescriptions increased against the same period in 2018.

However, the company was pressurised by falling international sales, which slumped 6.3 per cent to $2.7 billion (£2.1 billion) as it was weighed down by currency weakness.

The fall was particularly driven by weaker sales in the UK – or its Boots fascia – for the period, which were made worse by weakness in the pound.

Like-for-like retail sales in the UK fell by 2.7 per cent, although Walgreens Boots Alliance said Boots maintained its market share as high street competitors also saw sales wane.

Lower retail sales and margin in the UK weighed on profits for the international arm, with adjusted gross profits falling 5.4 per cent over the quarter.

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

Walgreens Boots Alliance said the store closures would primarily focus on local pharmacy branches in areas where it has other stores nearby.

“I am pleased with the progress that we have made in the re-boot of one of Britain’s best-loved retailers,” Boots managing director Seb James said.

“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.”

Walgreens Boots Alliance chief executive Stefano Pessina 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.

“While we still face headwinds, I am encouraged by the improvement in US comparable sales performance in the second half of fiscal 2019 and our progress in managing costs in order to save to invest to grow.”

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