Online improvements necessary to bolster Boots’ value for money proposition, says GlobalData

Following today’s release of Boots’ figures for Q3 2021/22; Juliet Cuell, retail analyst at GlobalData, a leading data and analytics company, offers her view: “Despite rising inflation resulting in consumers cutting back spend in recent months, Boots has been somewhat protected due to the essential nature of its offer, including toiletries and healthcare. Although comparable pharmacy sales declined 0.4% in Q3 FY2021/22 due to the timely NHS reimbursement in Q3 FY2020/21, retail sales grew 24.0% and Boots.com accounted for over 13.0% of these sales, 6.0ppts higher than pre-pandemic but still lower versus the wider H&B market. Further improvements to its online proposition are required to help offset the decline in instore footfall which remains below pre-pandemic levels.

“Now that Walgreens Boots Alliance is no longer selling Boots UK, it must ensure it capitalises on further opportunity for growth online – according to GlobalData, health & beauty online penetration is forecast to grow to 18.2% in 2026, 3.7ppts higher than in 2022. While Boots has swiftly launched its Price Advantage scheme online (offering advantage card members lower prices on certain items) in reaction to the cost-of-living crisis, improvements to its fulfilment are necessary to align with competitors such as ASOS. Free delivery is only available for orders over £25 at Boots.com, so lowering this threshold as well as providing free click & collect with no minimum spend will bolster its appeal among price-conscious shoppers and improve customer loyalty.

“Boots has committed to freezing the price of 1,500 own-label products to ensure they remain affordable. This is a sensible move from the health & beauty specialist as 31.5% of consumers will trade down and buy cheaper toiletries from the same retailer due to rising prices, according to GlobalData’s monthly consumer survey conducted in June 2022. Indeed, this price freeze will help prevent Boots from losing out to shoppers who may have switched to discounters and grocers to save money. 

“The same survey revealed that 65.1% of consumers plan to go on holiday this summer, and 33.4% will purchase health & beauty for these holidays. Boots must ensure it expands its Price Advantage scheme to include a variety of sun care brands, including sustainable ranges and products which protect against blue-light, to cater to ingredient-conscious shoppers who are also looking to make savings.”