Beauty demand buoys Boots after US owner halts sale plan

Boots has revealed a surge in sales over the past quarter as shoppers flooded back to UK high streets amid strong demand for its beauty products.

It comes just days after US owner Walgreens Boots Alliance (WBA) confirmed it dropped plans to sell the UK pharmacy chain and retailer.

On Tuesday, WBA said it will now keep Boots and the No7 beauty brand under its existing ownership following a strategic review which started in January and saw the group receive a number of takeover approaches.

Offers reportedly included approaches from suitors such as Indian billionaire Mukesh Ambani, valuing the business at about £5 billion.

In its fresh update, the WBA told shareholders that Boots sales grew by 13.5% in the three months to May as soaring retail demand offset a slight decline in pharmacy sales.

Boots’ like-for-like retail sales increased by 24% for the period, driven by its beauty business.

It said this was also buoyed by a bounce in high street footfall compared with the same period last year when pandemic restrictions remained in place.

Footfall across stores was up roughly 45%, with strong performances in flagship stores and travel locations, which basket sizes were up roughly 14% against pre-pandemic levels.

Retail growth more than offset a 0.4% decline in Boots’ like-for-like pharmacy sales.

Gross profit for the business increased by 3.2% compared with the same quarter last year.

Sebastian James, managing director of Boots UK & ROI, said: “The execution of our transformation programme and a sharp focus on expanding our key categories of healthcare and beauty, has driven strong sales and market share growth and further strengthened our position as the UK’s leading health and beauty retailer.

“Significant investment in both our digital platforms and in our stores is expected to drive continued market leading growth.

“As store footfall returns to pre-pandemic levels and with cost of living pressures increasing, the launch of our Price Advantage scheme, the expansion of our own label product range and our commitment to freeze prices on 1,500 essential products have been particularly well received by customers.”

WBA as a group saw sales from continuing operation decrease by 4.2% to 32.6 billion US dollars (£26.9 billion) over the quarter.