Following today’s release of Boots’ figures for the quarter ending 31st August 2024; Tash Van Boxel, retail analyst at GlobalData, a leading data and analytics company, offers her view: “Boots’ momentum has continued this quarter as total revenue grew 6.9% in Q4 FY2023/24, driven by the appeal of its beauty and healthcare essentials among holiday-goers. Its pharmacy division outperformed retail this quarter, achieving double-digit growth (up 10.0%) as demand increased for NHS and private services, with it being a go-to retailer for consumers seeking travel vaccinations for summer holidays. The retail fascia ended the year with 6.2% growth, building on an impressive result in the comparative period (up 11.7%). Boots is a destination for luxury and lower price point health & beauty, using its loyalty scheme to bolster customer retention, with a 4.5% increase in new member signups for the Boots Advantage Card. Value for money and own-brand offers remain integral as consumers seek lower prices via members’ pricing, discounts, and perks, such as building up points for future purchases.
“The pharmacy division outpaced retail for the first time since the pandemic. Sales rose 10.0% in Q4 FY2023/24, as holiday travel drove growth for the fascia. Indeed, while consumers seeking NHS and private healthcare services supported this result, with over 150,000 NHS Pharmacy First Service consultations during the period, summer travel was crucial for Boots’ pharmacy’s performance. The demand for holidays, which built up throughout the peak of the cost-of-living crisis, came to fruition in summer 2024. Consumers sought vaccinations for travelling abroad and over-the-count medicines, leading to growth in pharmacy medicine, services and own-brand off-the-shelf medication. To maintain the upward trajectory of the pharmacy fascia, Boots must invest further in its Online Doctor service, utilising AI to help consumers receive support for ailments faster and avoid the need for follow-up clinical assessments where possible.
“Boots’ continued success within beauty supported its retail division performance. Beauty sales rose 6% year-on-year, rounding off the year of beauty launches with brands such as TikTok favourites Made by Mitchell and Supergoop!. Boots has launched 55 new beauty brands throughout FY2023/24, solidifying its position as the UK’s health & beauty market leader as it wards off threats from beauty specialists Sephora and Space.NK. The broadening of its beauty offer should ensure that Boots stands out from its competitors, highlighting Boot’s willingness to stay up to date with current trends. Retail, like pharmacy, benefited from a holiday boom, as sales rose 20% for its own-brand suncream, Soltan, with consumers stocking up on holiday essentials. As we move into the golden quarter, we expect an increased demand for health & beauty throughout the Black Friday promotional period, as intention to spend on the category increased by 1.2ppts to 25% in GlobalData’s Black Friday Intentions 2024 report. Boots must showcase its beauty offer to take advantage of increased demand, using social media channels, TikTok and Instagram, to promote its offer. Influencer partnerships will be essential, enabling Boots to grow its audience and attract consumers away from Sephora.”
