Following today’s release of the Boots’ figures for the quarter ending 31 August 2023; Tash Van Boxel, retail analyst at GlobalData, a leading data and analytics company, offers her view: “Boots UK’s performance in its final quarter of FY2022/23 has rounded off an impressive year for the health & beauty market leader, with UK total sales up 10.9% year-on-year for Q4 FY2022/23. This has been driven by growth across both pharmacy and retail, with the former up 9.9% in Q4 FY2022/23 and the latter growing 11.7%. While much of this can be attributed to an improvement in footfall – Boots stated that total footfall had increased 4% in Q4 – the health & beauty specialist’s focus on improving stock availability enabled Boots to capitalise on this increase in visitors. Indeed, Boots’ retailer usage for summer holiday shopping rose 1.8ppts to 31.5% of shoppers purchasing this category in 2023, with a particularly strong performance in holiday healthcare (up 4.8ppts to 28.7%), according to GlobalData’s Retail Occasions: Summer 2023 report. Boots’ appeal is in part due to the strength of its loyalty scheme, with the number of active Advantage Card users at a three-year high this quarter as consumers make savings on key items such as suncream and skincare essentials, as well as collecting points. Indeed, 84.1% of consumers that are part of a health & beauty loyalty scheme are subscribed to Boots’ Advantage Card, making it the most popular retailer loyalty scheme in the health & beauty sector, according to GlobalData’s August 2023 monthly survey.
“Retail remains Boots’ strongest division, with sales up 11.7% in the reporting period, and up 12.5% year-on-year for FY2022/23. Skincare has been the best performing category, with sales up 25% as Boots’ own brand ranges proved popular among consumers, as shoppers traded down to lower price point alternatives. Premium beauty sales have also rocketed, up 20%, indicating Boots’ success in navigating the polarisation of the cost-of-living crisis well, appealing to both high-income consumers, shopping for big-ticket, luxury items, as well as less affluent shoppers who seek to make savings. With Boots’ new Battersea Beauty store forecast to open by 2024, premium beauty is anticipated to continue to drive growth in the next financial year, as this new store can better adapt and cater to consumer beauty demands, with new UK-exclusive brands on offer. Indeed, this beauty-focused store will enable Boots to better compete with the likes of Sephora, which is planning to open its second London store in the coming months.
“Pharmacy has maintained its upward trajectory this quarter, with sales rising by 9.9%. This has been driven by dental sales, with this category performing particularly well in July and August. This was aided by viral trends, with Hi-Smile growing in popularity on social media, encouraging consumers to attempt oral treatments at home at lower price points than paying for a professional service at a dentist.
“Boots’ online performance continues to improve, with Boots.com accounting for over 13% of total retail sales, up 2ppts from the previous year. Indeed, sales through this channel have grown 28.9% this quarter, as consumers turn to Boots’ website for retail and pharmaceutical needs. Its online pharmacy service, Boots Online Doctor, has become more popular, with orders up 25% in Q4 FY2022/23, driven by women’s health services, which rose by 100% on the same period last year. With continuous improvements to its website, Boots’ online channel is expected to go from strength to strength in the coming year, with offers such as £10 Tuesdays encouraging consumers to shop through Boots.com instead of popular pureplays such as Lookfantastic and Cult Beauty.”
