Boots, the country's biggest chemists, stayed on the sick list yesterday as it reported a fall in like-for-like sales and warned that trading conditions were likely to remain tough in the coming months.
The group, which has an estate of about 1,400 stores, posted a 0.8 per cent drop in same-store sales at Boots the Chemists outlets for the first quarter of the financial year - a performance it called " reasonable" in a tough market.
Market analysts had been expecting a fall of between one and two per cent or the period while the company itself said it was looking for like-for-like sales growth of between zero and two per cent for the year while continuing to invest in the business.
Chief executive Richard Baker said the moves to reestablish the retailer as a health and beauty expert had started to pay off with growth in core markets, although he added that trading conditions remained tough.
He said: "Conditions on the high street are difficult, competition is intense and there is nothing to suggest this will change in the coming months."
As well as six per cent growth in sales of beauty products, Boots said business in over-the-counter medicines and toiletries had been strong.
Sales were weaker in the company's lifestyle categories with a continued decline in the photo market and a slow start to its summer ranges.
Boots said volume growth in dispensing was offset by price deflation of five per cent, which included the impact of regulatory price changes.
At the company's Healthcare International division, which makes Nurofen and Strepsils, comparable sales were ahead by 6.8 per cent in the first quarter.
The sale of the division, which was put on the market earlier this year, was " proceeding in line with plan" and set to be completed by the end of the financial year.
More than ten groups are believed to have expressed interest in buying the business, which has a value of more than £1 billion.
The business has been put up for sale as part of a major restructuring aimed at winning back market share from supermarket rivals.
Changes to pricing structures and opening hours have been introduced, with an overhaul of the company's supply chain and computer systems also under way.
Brokers Numis said in a research note that yesterday's figures confirmed its view of "how tough Boots' core markets are". It added: "In our view, this turnaround is just as tough as Stuart Rose's attempts to revive M&S."