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Walgreens Boots Alliance prioritises 'turnaround' of Boots UK

A “top priority” for Walgreens Boots Alliance is to “turnaround Boots UK and return it to profitable growth”, according to the company's global chief financial officer.

Last week, Walgreen Boots Alliance attributed a 13.4% profit drop for the December-February period to “lower UK retail sales and pharmacy volumes”, as a result of COVID-19.

However, comparable pharmacy sales in the UK increased 3.2% in the same period and Boots.com sales were up 105% compared with the three months to February 2020, according to the company's latest financial results.

In a conference call with journalists following the release of the financial results, James Kehoe, global chief financial officer at Walgreen Boots Alliance, said that turning Boots UK around continues to be one of the company's “top priorities”.

“The strength of the Boots brand is a central pillar of supporting our recovery. Boots’ reputation, as measured by YouGov, is now at a five-year high,” he said.

“The dual focus on cost efficiencies and investing in our future continues at pace.”

COVID vaccinations

Mr Kehoe used the conference call to outline some initiatives to help transform Boots UK, including “playing a key role in NHS COVID-19 response”.

Boots now operates 25 COVID-19 vaccination hubs across the UK and has completed more than 2.6 million COVID tests for the NHS, he explained.

Mr Kehoe remained positive about the remainder of 2021 for Boots, noting that the UK is “one of the fastest immunisers in the world” and the government has “already defined a path to a complete reopening of the country”.

“This will lead to improved market conditions as we exit the year,” he said.

Online health hub and hybrid branches

As well as plans announced last year to expand its pharmacy services – including piloting “new private independent prescribing clinics”, and “building upon the success” of its cystitis test and treat service – the multiple launched the Boots online health hub in February, a Walgreens Boots Alliance spokesperson told C+D.

The new hub connects customers to the extensive healthcare services already available at Boots as well as to doctors, therapists and dermatologists, the spokesperson explained.

Boots has invested in its digital capabilities throughout the pandemic, expanding capacity and developing approximately 100 hybrid stores, they added, which benefit from a “store-based online fulfilment model”. This allows customers to order online, and for the delivery to be fulfilled from these branches.

174 pharmacy closures completed

While Boots continues to invest in its branches and online, it has also been taking decisive action to reduce its cost base and accelerated its transformation plan at the start of the pandemic, according to the spokesperson.

In 2019, Walgreens Boots Alliance announced around 200 loss-making Boots pharmacies would close as part of a “store optimisation programme”, while the remaining branches would be subject to Boots’ digital and in-store transformation.

The company has completed 174 of the 200 planned Boots closures and around 12 are still awaiting final approval from NHS England, the spokesperson told C+D.

The multiple temporarily paused the pharmacy closures last year, at the height of the COVID-19 pandemic.

“Fit for the future”

Boots’ managing director Seb James said the multiple’s “transformation plan continues at pace and is creating a strong and modern Boots, fit for a long-term future”.

Newly appointed CEO of Walgreens Boots Alliance Roz Brewer said she is “optimistic about the future of our company”.

However, “a digital platform can't stand alone. You have to have a human connection as well”, she stressed.

“I’m impressed in terms of what our pharmacists can deliver in terms of creating really deep personal relationships with the customer base,” Ms Brewer told journalists on the conference call.

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