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Boots cuts prices after sales rise
Shares in Boots, the UK health and beauty chain, rose 3.2 per cent to 735p in morning trade on Thursday after it reported stronger than expected sales for the fourth quarter of the year and said it was planning to cut prices on 1,000 products.
The company said that total sales were up 3.3 per cent in the fourth quarter of the year, while like-for-like sales were up 2.2 per cent. Allowing for factors such as changes in the pricing of drugs under the pharmaceutical price regulation scheme and the timing of Easter, Boots said underlying like-for-like sales were 1.5 per cent higher.
That performance was ahead of market expectations and better than in the third quarter, when Boots reported a 1.7 per cent fall in like-for-like sales. The strongest performing areas were cosmetics and fragrance, over-the-counter healthcare and dispensing. In what has been a tough trading environment we have performed solidly in our fourth quarter, said Richard Baker, chief executive.
We believe that the consumer environment is set to remain challenging and that there will be continuing inflationary pressure on retail costs. The company, which has been facing growing competition from supermarkets, is planning to cut prices on about 1,000 key health and beauty products by an average of 8 per cent. The move will be supported by a television advertising campaign.