Boots joins Christmas winners

For the 13 weeks to December 31 the health and beauty giant is understood to have delivered strong profitability as well as sales. Key drivers of growth at Boots UK are understood to include No7, fragrance, skincare and gifts. The rise came despite the pre-Christmas snowfall.

The figure puts Boots ahead of the sector-wide 4.2% Christmas like-for-like leap reported by the British Retail Consortium - the best industry performance in four years.

It means Boots was one of the winners of the festive season and puts it ahead of department store competitors Marks & Spencer and Debenhams, in which it competes in categories such as gifts and fragrance.

Group revenue for the quarter is understood to have increased by about 10% against 2008. The health and beauty division was up about 6% and revenue at the wholesale division climbed more than 12%.

The retailer’s growth also came despite supermarkets stepping up their battle for non-food spend. Tesco set up a dedicated perfume counter in some of its larger stores for the first time at Christmas to grab share from Boots.

It is thought customer service has been key to fending off the grocers. Retail Knowledge Bank senior partner Robert Clark said Boots has strong customer service, which sets it apart from the competition.

“There has been something of a move to known values and brands in the recession and that will have played a part in Boots’ performance,” said Clark. “Customers are looking for retailers they trust and where they get a good level of service - like John Lewis - and that is where Boots fits too.”

Boots is also thought to have recorded a strong performance in its branded higher-end gifts. That trend fits with grocers Tesco and Sainsbury’s results - both reported that shoppers sought to treat themselves over the festive period and sales of top-end ranges were high.
Clark said Boots has also upped its game in the face of competition. “Boots has evolved and made sure it has a niche against the competitors and that will stand it in good stead.”

The Christmas trading performance comes as Alliance Boots executive chairman Stefano Pessina steps up the plan to take the Boots brand into all major countries within five years.

Pessina is keen on acquisitions and partnerships such as the deal Boots has struck with Waitrose in the UK to cross-sell products. The Italian billionaire - who took the company private in 2007 in an £11.1bn deal backed by private equity giant KKR - said Alliance Boots had invested £800m in stores, service and acquisitions in two years and said there was more growth to come.
Alliance Boots was unavailable for comment.