The Investment Column: Boots card proves a major advantage

IT IS slightly curious that Boots got so much praise yesterday for the success of its loyalty card. After all, Lord Blyth, Boots' chairman, sat on the fence for ages, while other retailers showed what a piece of plastic could do for their turnover, before finally taking the plunge last September. Judging by the boost the Advantage card delivered to sales for the year to March, it's worth asking why Boots didn't get it on the market earlier.

This criticism aside, there's little doubt that the Advantage card has paid off. In just nine months Boots has issued 8 million of the cards, and over the year to March they accounted for 1.8 per cent of the growth in counter sales at Boots the Chemists. Apart from the profit that the card is generating, Boots also gets a wealth of information on spending patterns that it didn't have before.

The chemists chain remains the jewel in Boots' crown, producing like- for-like sales of more than 5 per cent. The Opticians branches, though a relatively small part of the group, stormed ahead with same store sales rising by a fifth. So it's not surprising to hear that the group is increasing its spending on the Opticians chains, while opening a further 30 superstores this year.

In other retail formats, however, success remains as elusive as ever. Halfords lifted like- for-like sales by just 3 per cent, although selling more own-brand goods helped boost profits by 28 per cent. Trading at DIY chain Do It All continued to be dull, with underlying sales up 6 per cent on a same-store basis. Ironically, the loyalty card has failed to catch on here and has been withdrawn.

Boots was keeping mum on reports that financial investors want to buy Do It All, though it would undoubtedly like to sell. However, Boots' growth - and its share price - will continue to depend on the performance of the chemists chain. On profit forecasts of pounds 620m the shares, up 28.5p to 984p yesterday, trade on a forward multiple of 21. Still good value.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Guru Careers: Pricing Analyst

£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Sales Team Leader - Wakefield, West Yorkshire

£21000 - £24000 per annum: Ashdown Group: The Ashdown Group has been engaged b...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders