Boots announces new sales falls

Boots, who have outlets in both the UK and Ireland, wrote off the chances of a major upturn in consumer confidence this Christmas, after disclosing a new sales fall today.

Boots said like-for-like sales declined by 1.6% in the second quarter – twice as fast as the rate of decline over the previous three months.

But the firm said the first-half decline of 1.3% was distorted by cheaper medicines due to regulatory price changes, insisting that sales of its health and beauty ranges and toiletries had been encouraging.

Boots, which has an estate of about 1,400 stores, estimated that lower prices of medicines had cost it about 1% of like-for-like sales over the past six months.

Chief executive Richard Baker said the strategy of emphasising the expertise of Boots as a health and beauty retailer was proving its worth.

Total sales of health products were up 0.2% in the second quarter to be 0.6% ahead in the first half, while beauty and toiletries maintained their growth momentum to stand 3.3% higher after six months.

But weak demand for food, photo products and electricals was reflected by sales of lifestyle ranges fading 3.4% in the second quarter to end the first half 3% down.

Mr Baker said: “Trading conditions have been difficult throughout the first half, with consumer spending softening further over the last quarter and we see no sign that the market will get any easier for the rest of the year.

“Our priority for the second half continues to be delivering for our customers while managing our trading margin, costs and working capital.”

Investors hoping for a detailed update on the £1.2bn (€1.75bn) auction of the Nurofen-to-Clearasil healthcare business were disappointed, although Boots insisted that the sale process remained on track.