Boots is facing fierce competition

The firm said total sales across the group were up by 5.2% during the final three months of 2003 compared with the same period last year.

Sales at its core High Street shops were up 4.1%, in line with forecasts.

The figures come a day after the firm said it was axing 900 jobs at its head office in Nottingham to cut costs.

Return to basics

"Boots the Chemists have had a good Christmas," said Boots chief executive Richard Baker.

The actions we have undertaken over the last few days underline our determination to build a modern, efficient, and competitive Boots Richard Baker, Boots chief executive Check out Boots' share price

"Customers responded well to the improvements we have made in our product ranges, value for money and service."

Boots said its profits for the full financial year would meet market expectations, thanks in part to a renewed emphasis on "retailing basics".

City investors welcomed the news, and Boots shares closed up 47.5p, or 7.2%, at 705p.

Fighting back

Boots has rolled out a wider range of price promotions, extended its opening hours, and recruited more shop floor staff in an effort to fend off stiff competition from the supermarket sector.

Last week, retail giant Tesco unveiled a �70m package of price cuts focused particularly on health and beauty products, in an aggressive assault on Boots' core market.

The 900 job cuts announced by Boots on Thursday follow the shedding of 500 posts last year.

Mr Baker, who joined Boots from retail giant Asda last year, said: "The actions we have undertaken over the last few days underline our determination to build a modern, efficient, and competitive Boots the Chemists".

Boots' statement rounds off a mixed batch of Christmas trading updates from Britain's leading retailers, with the evidence pointing on balance towards a slowdown in consumer spending.

Food retailers were the clear winners, with Tesco, Asda and Morrison turning in stellar sales growth.