Rise in customer footfall sees profits at Boots Ireland jump one fifth

After-tax profits at Boots’s Irish arm jumped 21.4 per cent in the year to the end of August to almost €25.6 million, driven by an increase in retail revenues as footfall rebounded in the aftermath of the Covid-19 pandemic.

Accounts filed by Boots Retail Ireland Ltd show that revenues from the health and beauty retailer’s pharmacy business, which accounts for 12.9 per cent of its total sales, increased by 5.9 per cent in the year, down from a rate of 13.9 per cent in the previous 12 months due to a decline in Covid-19 testing and vaccinations.

Retail sales, which accounted for more than 87 per cent of Boots Ireland’s total sales, increased 10.3 per cent in the year. In a report attached to the accounts, the directors noted that like-for-like sales had jumped 9.9 per cent in the year, up from 5.5 per cent in 2021, due to an increase in customer footfall following the ending of Covid-19 restrictions.

Overall revenues at the Wallgreens Boots Alliance group company climbed 9.7 per cent in the year to a record €475.4 million.

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Despite an uptick in pharmacy locum costs and a sharp increase in distribution costs from slightly more than €175 million in 2021 to €187 million last year, operating profits at the high street giant’s Irish arm soared by 13.6 per cent to more than €33 million primarily due to “stronger revenue performance”.

Boots Ireland opened two new stores in the year to the end of August bringing to 92 the number of outlets it operates in the Republic. However, staffing costs declined by 3.5 per cent to €68.7 million as the group’s headcount declined from 1,706 to 1,646 by the end of the company’s financial year.

Boots is expected to shutter a number of stories in Northern Ireland over the next year as part of a wider plan by the group to close about 300 outlets across the UK.

The decision, which will not affect the group’s footprint in the Republic, was announced in June after the pharmacy retailer’s parent group, Walgreens Boots Alliance, slashed its earnings forecast for the year amid weak demand for Covid-related services and “more cautious and value-driven” behaviour among consumers.

Boots reported a 6.9 per cent increase in footfall in the year and a 25 per cent increase in digital sales. But the wider group reported a small decline in same-store sales at its retail division compared with estimates of a 2.1 per cent increase.