Consumers are feeling the pinch

Like-for-like sales at Boots the Chemist outlets fell by 0.8%.

The retailer is the latest to report that consumer demand is sputtering. On Wednesday GUS and Clinton Cards said retail conditions were "challenging".

Increased competition, higher interest rates and more expensive petrol are all taking their toll, analysts have said.

'Tough market'

"Conditions on the High Street are difficult, competition is intense and there is nothing to suggest this will change in the coming months," said Richard Baker, chief executive of Boots.

"This is a reasonable performance in a tough market, against our strongest trading period last year."

Overall sales at Boots the Chemist rose 1.5% during the fiscal first quarter. For the Boots Group as a whole, revenues were up 1.9% on a year earlier.

Boots said that "the quarter saw good performance in Beauty, with particularly good growth in cosmetics", adding that it planned to invest more money in that part of its business.

"Toiletries also performed well," the company said, though "sales were weaker in the Lifestyle categories, with continued decline in the photo market and a slow start to summer ranges".

The company said it expected to complete the sale of its Boots Healthcare International division by the end of this year.