Boots UK sales slide amid high street turmoil as US owner posts growth
The UK retail business saw sales slip 2.1% over the fourth quarter to August 31.
Boots has posted sliding sales in the UK as its US-based owner hailed overall growth for the past year.
The UK retail business saw sales slip 2.1% over the fourth quarter to August 31, after like-for-like pharmacy sales declined 1%.
UK sales were hit by lower volumes and a decrease in NHS funding, as it struggled in “challenging” retail conditions.
Walgreens Boots Alliance saw group sales annual jump 4.1% to 136.9 billion US dollars (£106.7 billion) as it was buoyed by a strong fourth quarter which surpassed expectations.
Sales for the three months to August increased by 1.5% to 34 billion dollars (£26.5 billion), while operating profits slumped by 20.5% to 5 billion dollars (£3.9 billion).
The US retail pharmacy division posted a 2.1% rise in sales to 26 billion dollars (£20.2 billion) for the quarter as the volume of prescriptions increased against the same period in 2018.
While we still face headwinds, I am encouraged by the improvement in US comparable sales performance in the second half of fiscal 2019 and our progress in managing costs in order to save to invest to grow Stefano Pessina, Wallgreens Boots Alliance
However, the group was pressurised by falling international sales, which slumped 6.3% to 2.7 billion dollars (£2.1 billion) as it was weighed down by currency weakness.
The fall was also particularly driven by weaker sales in the UK for the period, which were made worse by weakness in the pound.
Like-for-like retail sales in the UK fell by 2.7%, although the company said Boots maintained its market share as high street competitors also saw sales wane.
Lower retail sales and margin in the UK weighed on profits for the international arm, with adjusted gross profits falling 5.4% over the quarter.
In July, Boots confirmed plans to shut down around 200 stores over the next 18 months, placing thousands of jobs at risk.
The company said the store closures will primarily focus on local pharmacy branches in areas where it has other stores nearby.
Seb James, managing director of Boots UK & Ireland, said: “I am pleased with the progress that we have made in the re-boot of one of Britain’s best-loved retailers.
“Nevertheless we are aware that this is a journey and that market headwinds have been strong and look likely to remain so for some time.
“Though we have declined in like-for-like terms this year, I am glad that we have retained share across the board and grown significant share in beauty and pleased with the progress we’re making to digitise our pharmacy offer.”
Stefano Pessina, executive vice chairman and chief executive of WBA, said: “We are pleased to report fiscal 2019 results in line with our previously stated guidance despite a challenging operating environment.
“We are also making progress on our four strategic priorities, which we remain confident are positioning us to deliver long-term growth.
“While we still face headwinds, I am encouraged by the improvement in US comparable sales performance in the second half of fiscal 2019 and our progress in managing costs in order to save to invest to grow.”