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Around 200 loss-making Boots pharmacies to close in 18 months

Walgreens Boots Alliance: Staff will be redeployed to nearby branches
Walgreens Boots Alliance: Staff will be redeployed to nearby branches

Boots’ parent company plans to close around 200 branches across the UK over the next 18 months, it announced today.

Walgreens Boots Alliance is looking to “reduce [its] store count by 8%” in the UK through a “store optimisation programme” that targets around 200 loss-making Boots pharmacies, it announced alongside its latest financial results today (June 27).

Around two thirds of the 200 branches are “within walking distance of another Boots” pharmacy, Walgreens Boots Alliance chief financial officer James Kehoe told analysts during a conference call after the results were published.

The company did not say which 200 pharmacies it has earmarked, but co-chief operating officer Alex Gourlay said the branches are “relatively small”, where the main cost to the business is the pharmacist.

Colleagues to be redeployed

Mr Kehoe said the company does not expect there to be “a significant impact on colleagues, [as] we plan to redeploy [them] to nearby stores”.

Closing 200 “less efficient” branches is “quite logical”, he added.

Boots told C+D it cannot confirm the locations of the 200 branches at this stage.

“Reinvigorating the Boots UK model”

Mr Gourlay said the company is “making good progress in terms of reinvigorating the Boots model in the UK in very difficult times”, referencing Boots’ digital and in-store transformation.

Boots’ “store of the future” opened to the public today in Covent Garden, London. See C+D’s behind-the-scenes look at this flagship store.

Mr Gourlay said the new branch “will not only be the future of Boots, but could give us some great ideas for the US market as well”.

Pharmacy sales rise

According to the latest financial results for March-May 2019, Walgreens Boots Alliance saw a 1.6% drop in pharmacy sales in its retail pharmacy international division – which includes Boots – compared with the same period last year.

This drop was “mainly due to a 1% decline in Boots UK”, Walgreens Boots Alliance said. Pharmacy sales within Boots itself increased 0.8%, while retail sales decreased 2.6% “with Boots UK broadly gaining retail market share amid weakness in certain categories”, it added.

Operating income for the retail pharmacy international division decreased 10.5% on a constant currency basis in the same period.

“Our UK pharmacy business was impacted by temporary industry-wide NHS under-funding and higher generic pricing. These impacts were only partially offset by prescription volume growth,” Mr Kehoe explained.

17 Comments
Question: 
Have you been informed that your Boots branch is at risk of closure?

A B, Community pharmacist

Bricks and mortar pharmacies are not part of the NHS and large chain multiples' long term plans. In their opinion they cost too much to run compared to online/hub and spoke set ups.

However, like others have said on here, this may give some independants an opportunity if they are close to where a branch is closing. Although from what it says in the article the pharmacies nearby are Boots anyway.

R A, Community pharmacist

"Our UK pharmacy business was impacted by temporary industry-wide NHS under-funding and higher generic pricing. These impacts were only partially offset by prescription volume growth "

Hardly a business then is it? Pharmacies depended on the goodwill of the government to make a profit. In the past, most pharmacies were profitable because the government paid them very handsomely for their services and now they see no need! Wake up and smell the coffee people.

 

A England, Manager

.....I am joyous nonetheless to hear a multiple shutting down. The biggest cost to the pharmacist is the multiple. The biggest threat to the pharmacist is the multiple. While the multiples are so many and powerful, the pharmacist is a worthless semi-professional of a slave.

Chris Locum, Locum pharmacist

An oversupply of graduates does not help either. I remember the days of the so-called 'front-loading' of the contract in favour of the smaller operator and the injustice of it. It was supposed to be the last man standing, and winner takes all. The big operators now find that they can feel the pinch on cash flow. Why the monopolies' and mergers commission didn't get involved in a more significant way with the distribution of some corporate pharmacies always puzzled me. I hope there may be some slim opportunity for existing independents to help them weather the current climate a little better.

A England, Manager

...."where the biggest cost to the business is the pharmacist...."
WHAAAAT! The pharmacist is the business!

That is like saying let's get rid of John Boot, he is the biggest cost to the business..... yeah great idea!

CAPT FX, Locum pharmacist

You hit it on the head. The Pharmacist is what makes Pharmacy a Professional business. In that statement, therein lies the source of our problems. This is why we note a trend where efforts are being made to do away with the Pharmacist. They hope this business can proceed without a Pharmacist so they can make more money.

Barry Pharmacist, Community pharmacist

I guess if you are in the business of writing about new car models and a lot of your print comes as a result of "goodwill" of manufacturers who let you see their new shiny models then this will have an impact as to how you write up your report.

I think that best describes the way that C&D has described todays news while also being given access to the new shiny latest "model".

The truth is that Boots senior management knew this was on the cards when it was reported by Sky News a few weeks and yet C&D are not challenging those same senior managers today.

So as a proud reader of many years that is something that makes me very sad. 

M Yang, Community pharmacist

As the saying goes, "You reap what you sow" but the silver lining to Boots' misfortune is that decently run independent pharmacies can look to benefit from the influx of patients. The patients in turn can experience what it's like to use good pharmacies that actually do a good job. My only misgiving is that Boots tends to attract a LOT of bad patients, the worst of the worst, so those in the independent sector can look forward to that too!

 

SP Ph, Community pharmacist

""where the main cost to the business is the pharmacist.""

There you go. You keep cutting staff till you have no one but the Pharmacist to do everything. And when this doesn't work (which is obvious) you finally close the shop.

 “within walking distance of another Boots”

1. Why did you open these, if there was no need? Same question to NHSE & DoHSC -- Why did you allow??

2. Did they become loss making after you shifted most of the patients to the other shop or Hub & Spoke.

Overall, I think it is best for the Pharmacy Market. Hopefully now the UK public will understand the importance of supporting their Independant Pharmacy and not a BIG Brand that only looks in to Profits and everything else next.

Unfortunately very Sad for all those employees and locums, as I am sure when they say "plan to redeploy" that means they will be given a place/ position they will have difficulty in accepting, hence quit (so no redundancy pay either)

Jenny P, Hospital pharmacist

"1. Why did you open these, if there was no need? Same question to NHSE & DoHSC -- Why did you allow??"

They often didn't open them, exactly - they often bought out competition which was nearby. In one Boots I worked at, which was an independent that was bought out and rebranded, there was another Boots just 150m away. The next Boots I worked for, it was 300m away from the town's other branch. It seemed to be very common for those situations to occur.

Julie Friday, Accuracy checking technician

Exactly why a lot of long sevice staff were forced out over the last few years.

Saddened Old Timer, Community pharmacist

Headline in the article a month ago Every one of Boots’ 2,485 branches will benefit from the multiple’s transformation strategy this year, director of pharmacy Richard Bradley has told C+D.

 

 

 

Chris Locum, Locum pharmacist

Yeah, they have been rebranded as closed, unfortunately...

Benie I, Locum pharmacist

3 weeks ago.

“No major programme of closures”

Following claims by Sky News earlier this week that more than 200 Boots storescould close over the next two years, Mr Bradley reaffirmed that there are “definitely no plans [and] no major programme” of closures envisaged.

Adam Hall, Community pharmacist

This isn't what might be considered a 'major programme of closures' but just 'business as usual' with portfolio reviews and trying to minimise the impact on the business as a whole of loss-makers. Simply, good business husbandry 

Benie I, Locum pharmacist

You're right, silly me. I completely misunderstood.

C A, Community pharmacist

Yes Benie, just because Boots is decimating it number of stores (look up the historical meaning - getting rid of 1 in 10, granted 200 stores is only 8% but close enough for government work) doesn't mean this is a major thing. Plus decimation really focus' the minds of those left. Expect profits and productivity to go through the roof!

Of course the answer may be all that could be bunkum and Mr Bradley could be a major fibber...

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