Boots sales surpass pre-Covid levels as city centres spring back to life
Boots’ retail sales have exceeded pre-Covid levels for the fourth quarter, thanks to rebounding footfall in city centres.
Retail sales were up 15.2 per cent on a like-for-like basis, with stores near transport hubs seeing a particular resurgence.
Warm weather and a return of travel abroad also buoyed sales, with store transactions up more than 20 per cent in the fourth quarter.
After a pandemic boom, Boots’ online platform managed to retain Covid gains, posting sales more than 100 per cent higher than the comparable quarter in 2019.
The results were described as “really encouraging,” by Sebastian James, managing director of Boots UK & ROI, who said the company’s market share had been increasing.
The British chemist’s soaring sales signal good news for its US owners, the Walgreen Boots Alliance (WBA), which opted to shelve plans to sell the chain this summer.
The pharmacy giant declared it would retain full ownership of the chemist, citing “unexpected and dramatic change” felt by the global financial markets earlier this year.
It blamed market instability’s impact on suitors’ financing availability, with no parties able to make an offer that “adequately reflects the high potential value” of Boots and the cosmetics brand No7.
After a protracted auction process, only a consortium of Apollo and Reliance Industries had lined up lenders to finance an acquisition.
While the billionaire brothers behind Asda, Mohsin and Zuber Issa and TDR Capital, had seemed eager to make a bid, financing had also reportedly proved difficult.
Boots’ strong retail sales was testament to the “resilience and appeal,” of the business’s products, Russell Pointon, director of consumer at Edison Group, said, pointing to other consumer businesses that having experienced rockier trading.
Against a backdrop of macroeconomic and political uncertainty, investors were “likely split between those that are looking for opportunities amongst the lowly-valued discretionary companies,” and those looking for more resilient companies, Pointon told CityA.M.
Many veteran investors would remember Boots “a reliable company with an attractive dividend yield,” he said.