‘Ensuring future success’ Why Boots is closing 200 stores in digital health revolution

‘Ensuring future success’ Why Boots is closing 200 stores in digital health revolution

The company was established in 1849 by John Boot, but after his father’s death in 1860, Jesse Boot, aged 10, helped his mother run the herbal medicine store in Nottingham. Today, Boots is one of the largest retailers in the UK in terms of revenue and number of shops, with 2,500 stores ranging from local pharmacies to large health and beauty shops. Its shops are primarily located on the high streets and in shopping centres, selling a plethora of products as well as providing optician and hearing care services, but after reporting sales were down by 7.3 percent in 2019, its parent company, Walgreens Boots Alliance (WBA), announced it would close 200 stores.

Sebastian James, managing director of Boots UK, said in 2019: “WBA has now approved an outline plan to consolidate around 200 local pharmacies, stores where we have a large number within close proximity.

“We believe this is the right thing to do as it means that we can invest more in staffing those stores while not reducing our 90 percent coverage within a 10-minute drive of a Boots.

“We do not anticipate a significant effect from this activity to colleagues as we will redeploy the overwhelming majority to neighbouring stores.

“At the same time, we continue to open new stores where we believe there are communities that would benefit from a new Boots – for example, the new Covent Garden flagship.

Boots will close 200 stores by the end of the year

Boots will close 200 stores by the end of the year (Image: GETTY)

Boots was founded over 170 years ago

Boots was founded over 170 years ago (Image: GETTY)

Boots also announced earlier that year that it would axe more than 350 jobs at its head office in Nottingham as part of a restructure, following a £71million slump in sales and fall in revenues of £158 million in the year to the end of August 2018.

Boots said many of the stores being considered for closure are “loss-making” and around two-thirds are within walking distance of another Boots store.

Mr James added: “There’s no doubt that trading conditions are tough on the high street and health care and retail are facing a challenging reality.

“Boots is not immune to these pressures, however, we have a remarkable brand and I am continually amazed by the extraordinary deep love and respect people have for Boots.

“We’re still a very successful company with a phenomenal presence in the UK but we need to make some tough decisions to transform the fundamentals of our business, building on our 170-year legacy, to ensure our future growth.”

in 2014 Boots became a subsidiary of Walgreens Boots Alliance

in 2014 Boots became a subsidiary of Walgreens Boots Alliance (Image: GETTY)

While revenues and sales were down overall, Boots UK comparative pharmacy sales increased by 0.8 percent and Mr James said an emphasis on shifting the company from the high street to online is part of the new vision for Boots.

He added: “We’re transforming the experience for customers when they shop with us and our focus is on making our stores and online offer even more differentiated and personalised, with the best brands at the best value.

“We’re working very hard through these plans and I’m excited about what this means for the future of Boots.

“We have the number one health and beauty website, the most popular UK loyalty scheme and the most trusted pharmacy, second only to the NHS. 

“We have amazing and compassionate colleagues who work hard every day. What we’re doing today is about ensuring our future success.”

Boots is moving more of its operation online

Boots is moving more of its operation online (Image: GETTY)

Boots is on track to close 200 stores by the end of the year

Boots is on track to close 200 stores by the end of the year (Image: GETTY)

In January, it was reported that 28 of the 200 pharmacies had already closed and WBA announced it was on track to complete all 200 closures by September 2020.

Co-chief operating officer Alex Gourlay told Chemist and Druggist that Boots’ online prescription service, which launched last May, had made “solid progress” in the market.

He added that the company was “developing new initiatives in digital healthcare” and has plans “for expanding pharmacy services to improve the customer journey and broaden access to healthcare”.

Although Boots has continued operating during the recent pandemic due to its status as an “essential” retailer, it is adjusting its operations in line with health and safety measures that could have long-term impacts.

Boots announced in April that it had begun trialling a new GP and pharmacy online video consultation service, giving consumers the opportunity to call up via the web to receive general health advice from pharmacists. 

Boots said “many people have recently moved to online shopping”, and the retailer has responded to the shift in demand by doubling its web capacity and finding new ways to facilitate orders.

As part of the drive to support more demand for its online operation, Boots brought in additional collaborative robots, called ‘Cobots’, to its warehouses. 

They were originally deployed ahead of 2019’s Black Friday period, but have become a common sight at the retailer’s main Burton facility to help carry orders between picking stations.

Published at Thu, 18 Jun 2020 10:30:00 +0000