Boots retail sales increased by 13.4% during the third quarter of its financial year as its parent company praised its performance as “towards the top end of expectations”.
The retailer, which is part of Walgreens Boots Alliance, has been investing heavily in its brand and price proposition over the past two years as it looks to drive reappraisal, including the recent overhaul of its Advantage Card loyalty offer.
Overall sales in the UK increased by 10.2% year on year, including a 5.7% boost for its pharmacy business. This led to Boots growing its market share for the ninth consecutive quarter, with gains across all categories, according to Boots Walgreen Alliance’s global chief financial officer, James Kehoe, talking on an investor call today (27 June).
He described the retailer’s results as “reflecting a strong execution, especially in the UK” and praised the Boots business for reaching targets “towards the top end of expectations”.
He also praised the launch of No7’s Future Renew, a skincare cream aimed at reducing the signs of ageing and damage, which was met with “a very positive” customer response and will be rolled out to the American side of the business.
There was positive news, too, for footfall which grew 7% compared to the same point last year and also for Boots.com, which performed particularly strongly, with sales up 25%. Kehoe claims Boots.com now accounts for 14% of the brand’s retail sales.
Why Boots is overhauling its loyalty scheme with its ‘biggest ever’ investment in priceThe results are vindication for the retailer after a heavy investment in brand marketing and price over the past few years.
Boots revamped its loyalty proposition earlier this year in a move its CMO, Pete Markey, described to Marketing Week as its “biggest ever” investment in price. The change was made to increase immediate value for customers so despite a drop in the value of an Advantage point, the new set up is designed to give greater options for shoppers to find discounts in-store and online.
This shift in proposition followed a major campaign for Advantage Card last year, its biggest ever at that point, which saw the loyalty scheme promoted on TV for the first time in its 25-year history. The £3m campaign generated a return on investment (ROI) of £2 for every £1 spent and helped increase members by 1.1 million members in the year to March.
Markey has also previously spoken about the importance of investing in brand. “When we invest behind the brand, all the other metrics improve. Paid search, digital and the cost per sales improve as we drive that top line awareness of the brand and consideration of Boots,” he said.
Overall, Walgreens Boots Alliance’s third quarter sales increased 8.6% year-over-year to $35.4bn, which it said was behind expectations, owing to a mixture of macroeconomic factors and Covid.