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Boots pharmacy sales up 8.8% but footfall remains ‘sensitive’ to COVID variants

Boots UK is continuing to recover from its 2020 losses but its parent company, Walgreens Boots Alliance, has cautioned that footfall will remain “sensitive to new COVID-19 variants”.

Presenting Walgreens Boots Alliance’s latest financial results during a conference call yesterday (January 6), chief financial officer James Kehoe said that the company’s international markets – including Boots UK – are “continuing to recover nicely”.

Adjusted gross profit for the international segment increased 18.2% on a constant currency basis, “reflecting strong UK growth”, Walgreens Boots Alliance said in a statement released ahead of the conference call.

In particular, Boots UK's comparable pharmacy sales increased 8.8% in the September-November period compared with the same period the previous year, Walgreens Boots Alliance added.

Meanwhile, adjusted operating income grew to $164 million (£121m), “an increase of 88.6% on a constant currency basis” compared with the September-November period the previous year.

Boots UK managing director Sebastian James said the multiple had “delivered another strong performance this quarter”, showing “very encouraging market share growth” and “with both retail and pharmacy sales continuing to increase year on year”.

 

Footfall still a concern

 

However, while footfall to pharmacies recovered during the September-November period, it remained around 20% below pre-COVID levels, Mr Kehoe added.

He noted that the UK government had instituted “slightly tighter restrictions” as of December 13, to mitigate the spread of the new Omicron variant, thus he said footfall “will remain sensitive to new COVID variants”.

Mr James mirrored Walgreens Boots Alliance’s projections about the variant in his own statement, saying: “COVID-19 restrictions continue to create headwinds for the UK high street but we remain focused on delivering for our customers”.

C+D reported in October last year that Walgreens Boots Alliance had attributed its growth in sales numbers for the June-August period to the “ongoing recovery in the UK market, where COVID-19 restrictions were lifted on July 19”.

 

COVID-19 testing boosted sales

 

During the conference call, Mr Kehoe said that pharmacy sales in the UK were “up more than 200% year-on-year”, “benefiting from COVID-19 testing”. Boots UK’s statement noted that “COVID-19 private travel testing services” was “included” in the sales increase. 

Retail also grew compared to the same quarter the previous year, with a 16.3% increase that reflected “a recovery in footfall and strong commercial execution”, Boots wrote in its statement.

Boots also saw extensive uptake of flu vaccinations, Mr Kehoe said.

“We recorded our largest ever season, with 2 million vaccinations during the first quarter” of 2022, he stated, “up 150% compared to last year”.

Mr Kehoe noted the continued gains made in Boots’ online sector, with digital sales “almost doubl[ing] compared to the equivalent pre-COVID quarter, now accounting “for more than 15% of total retail sales”.

Boots UK wrote in a statement that the multiple had delivered COVID-19 booster vaccinations from more than 80 branches and in December had “doubled appointment capacity at existing sites and added a small number of new sites” to support national effort to accelerate booster uptake.

Since opening its first vaccination hub at its Halifax store in January 2021, the multiple has administered “over 1.2 million COVID-19 vaccinations”.

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