Boots unveils plans for longer opening hours
Saturday 17 January 2004
Boots yesterday upped the ante in its war against the supermarkets by unveiling plans to extend its store opening hours and invest at least £20m in lower prices over the next year.
The salvo came as the group reported strong underlying Christmas sales, viewed by the City as the first sign that its new chief executive, Richard Baker, could succeed in turning around the struggling retailer. Its shares surged 7 per cent to 705p, topping the FTSE 100 leaderboard.
Mr Baker said more than 100 of its biggest stores would open on Sundays to take advantage of changing shopping patterns. Its outlets at railway stations and airports will open earlier and close later, with its site at Stansted airport due to open around the clock.
"It's about Boots being open at our customers' convenience," Mr Baker said, adding that its pharmacies would synchronise their trading times with doctors' surgeries.
The company said like-for-like sales growth accelerated during its third quarter to 31 December, rising by 4.1 per cent. This was towards the top end of analysts' expectations and marked the sixth consecutive quarter that its core Boots the Chemist chain had shown reasonable growth. As anticipated, its group gross margin slipped by 30 basis points, reflecting its decision to invest more in lowering prices.
The group, which is axing 900 jobs at its Nottingham headquarters, said its decision to double the number of Christmas gifts available as part of a "three-for-two" promotion had paid off. Comparable gift sales grew 10 per cent, while underlying sales of electrical gifts such as this year's must-have hair straighteners rose 9 per cent. Like-for-like health sales rose 7 per cent, buoyed by the cold and flu bugs that swept the country before Christmas. But like-for-like sales of toiletries during the quarter was flat, against a 1 per cent rise during the first half. This reflected prices on average 16 per cent lower across 1,500 products, Mr Baker said.
Mr Baker said further job losses were in store for the remaining staff at its head office over the next two years. "We're getting on with the job of making Boots better," he said.
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