Boots is working on a major upgrade of its Advantage Card programme as it plans for another tough year in the health and beauty market.
Under a project entitled Advantage Card Futures, to be completed by the end of this year, the retailer is working on increasing the personalisation of the card, with mailings tailored to individuals’ shopping patterns and personal needs.
It will also make it easier to collect points when shopping online.
“We will have more understanding of what individual customers want and be able to personalise our mailings with offers and relevant information,” said Alex Gourlay, chief executive of Boots health & beauty division.
The plans come as parent company Alliance Boots revealed a 14.2% increase in full-year trading profit to £1.16bn, including its shares in associates and joint ventures. On the same basis EBITDA rose 10.8% to £1.44bn in the year to March 31.
However, the growth was driven by the group’s wholesale division, rather than retail where the performance was more subdued. Sales were up 1.7%, trading profit up 5.5% to £767m and UK like-for-likes up 1.2% inclusive of VAT.
Gourlay was upbeat about the results but said the company expected conditions to remain tough. “We’ve pulled off an increase in revenue, increased margin and increased market share in our core markets,” he said. “But we’re planning for the market to remain flat, and we need to work harder for our customers and to earn their loyalty.”
Cosmetics sales fell against tough comparables and baby products were hit by supermarket competition.
Gourlay said 150 mid-sized stores would be refitted during the next year, typically allowing a 5% increase in the range on offer. 40% of online orders are now collected in store.
Executive chairman Stefano Pessina confirmed that there were no plans to replace departed group chief executive Andy Hornby in the immediate future, but “in due course” there would be a search that will be open to internal candidates.
He added that any decision to sell the business would be down to lead investor KKR, but said he did not expect any developments in the next two to three years.