By  on September 30, 2005

LONDON — The overall slowdown in U.K. retail sales is taking its toll on Boots.

Boots Group plc said Boots the Chemists' sales for the second quarter ended Sept. 30 will rise 0.8 percent year-on-year. For the first half, sales are expected to be up 1.1 percent, the company said in a statement Thursday.

"Trading conditions have been difficult throughout the first half, with consumer spending softening further over the last quarter, and we see no sign that the market will get any easier for the rest of the year," Richard Baker, chief executive of Boots Group, said in a statement.

Boots routinely publishes percentage estimates due to the timing of its fiscal calendar.

Beauty and toiletries, which grew 3.2 percent in the quarter and 3.3 percent in the half, were a bright spot, however. "The encouraging performance of our health and beauty businesses in a tough retail climate reflects our renewed focus and investment in these growing markets," said Baker in the statement.

Boots the Chemists invested in new beauty departments, self-selection merchandising units and the relaunches of its No. 7 and 17 brands, the statement said, adding sun care "continued to perform well." Baker said that the sale of Boots Healthcare International is "on track."

BHI's sales growth in the second quarter is estimated at 9 percent. In the half, a sales uptick of 7.6 percent is forecast. Boots said its Boots Retail International divisions sales grew 12 percent in the half and that it has inked a deal with M.H. Alshaya Co. to open eight Boots stores in the Middle East "with a view to further expansion."

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