Profits at Boots UK stores fell by 18.3% last year as sales also struggled.
For the year ending 31 August the company, which is owned by Walgreens Boots Alliance, reported profits of £317m and revenues of £6.8bn, a fall of 2.3% compared with the previous year.
The fall is also reflected in its number of active users of Boots’ Advantage Card loyalty scheme which also dropped from 14.6 million to 14.4 million.
In the accounts filed at Companies House, Boots stated that the company’s “retail revenue, gross profit and gross profit margin are impacted by, among other things, the highly competitive nature of the health and beauty category”.
The news comes as it is feared Boots may be forced to close some of its stores after Walgreens Boots Alliance experienced a “disappointing quarter” in Q2 this year, in which it warned of “significant restructuring” – including the possibility of British store closures – as part of a drive to save more than $1.5bn (£1.2bn) in annual costs by the 2022 financial year.
During the period Boots closed down one net store leaving it with a current estate of 2,485 stores. However one casualty of the restructuring plan was the company’s Nottinghamshire headquarters which saw 350 jobs lost in February this year.
In April Walgreens executive vice chairman and CEO Stefano Pessina said: “The market challenges and macro trends we have been discussing for some time accelerated, resulting in the most difficult quarter we have had since the formation of Walgreens Boots Alliance.
“We are going to be more aggressive in our response to these rapidly shifting trends. We are focusing on our operational strengths and addressing weaknesses, making a number of senior appointments to bring change and accelerating the digitization and transformation of our business.”