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Boots blames lower prescription volume and cuts for drop in sales

The drop follows a 2.8% fall in retail sales from December 2017 to February 2018
The drop follows a 2.8% fall in retail sales from December 2017 to February 2018

Boots has blamed a 2% drop in its sales in pharmacies on fewer prescriptions and cuts to government funding.

The multiple’s parent company Walgreens Boots Alliance saw a 1.7% drop in pharmacy sales in its retail pharmacy international division – which includes Boots – from March to May 2018, compared with the same period last year.

But this drop was even steeper – at 2% – within Boots itself, which the multiple attributed to “lower prescription volume” and the reduction in “government funding”, it told journalists this afternoon (June 28).

In its latest financial report, published today, Walgreens Boots Alliance said its retail sales had also fallen – by 1.3% – in this division, which was “mainly due to Boots UK”.

The company said “over 80%” of this decline was due to the “phasing of certain selling, general and administrative expenditures” at Boots. “The remaining decline reflects lower gross profit, largely offset by containment measures.”

It follows a 2.8% fall in retail sales for December 2017 to February 2018 – when compared with the same period the previous year – which the company said at the time was also “mainly due to Boots UK”.

Wholesale sales rise

Meanwhile, the company’s wholesaler division – which includes Alliance Healthcare – saw sales increase by 4% between March and May 2018.

While this was below Walgreens Boots Alliance’s estimate, it pointed out that “challenging market conditions in certain continental European countries” had been “partially offset by strong performance in emerging markets and the UK”.

Overall sales across Walgreens Boots Alliance increased 14% to $34.3bn (£26.2bn) compared with the same period last year, it said.

CEO Stefano Pessina said he was “pleased that, in what has been a challenging environment, we have again delivered solid earnings per share growth combined with healthy cash flow”.

33 Comments
Question: 
What do you make of Boots' finances?

Meera Sharma, Primary care pharmacist

Given the current pricing fluctuations with no valid reasons - there is a lot of questions that should be directed to wholesalers. It is costing teh whole of the NHS ridiculuous amounts of money and hasn't gone unoticed.

Peter Sainsburys, Community pharmacist

Forgive me if I am wrong but it would appear that the current ethos in community pharmacy in the UK is thus:

1. Keep reducing staff to keep increasing profits. If the pharmacist leaves, replace them. There are loads of mugs coming out of UK "pharmacy schools" anyway.

2. Keep forcing more and more work on your pharmacists via service targets. As a company we don't know or care what these services actually are, but we get money for them so we want more and more.

3. If there's a serious error, blame the pharmacist and sack them. As above, they are easy to replace.

4. Siphon all the profits off to a foreign country in order to avoid as much tax as possible.

5. Repeat.

6. Buy yacht and expensive art collection. Forget about the pharmacists whose lives you have destroyed.

Clive Hodgson, Community pharmacist

Spot on Peter, as was the earlier comment by “N Locum”. This is the reality for most of community pharmacy these days. Even Duncan Rudkin commented on how many newly qualified pharmacists were expressing total disillusionment with CP as reported in a recent C&D article.

This situation is exactly what the RPS should be highlighting and shouting about. (It won’t of course because that would upset the Multiples). Instead it is still peddling a vision of Pharmacy that bears no resemblance to the reality. Unfortunately, so many students only realise too late that they have been totally mislead.

Peter Sainsburys, Community pharmacist

The RPS does nothing, and the GPhC seems only to exist to reprimand pharmacists, and not to "protect the public" as they are mandated to.

Both organisations use up a great deal of money, but because pharmacists never speak up or question anything, the situation is allowed to continue.

And I can't blame Rudkin, he's on a nice little earner spouting the occassional few words about pharmacy which we all knew anyway, while he continues sending pharmacists to FTP to make it look like he's doing something useful. During which time, he is earning a nice little number and has got an executive office in Canary Wharf.

In the meantime, newly qualified pharmacists can't get jobs whilst their student loan is constantly increasing. The previous generation of pharmacists are tearing their hair out because they have got a family to support, but being harrassed on a daily basis to fill out pieces of paper which NOBODY WILL EVER READ is making their life not worth living.

The whole profession is utterly in the toilet and I can understand why people are posting about getting out. We are talking about tens of thousands of "professional" people in the UK who are being treated like rubbish, having their lives destroyed, whilst the professional bodies do absolutely nothing.

I very recently made the decision to leave the profession, and to only ever step into a pharmacy again as a patient. My health and quality of life have both improved dramatically.

It's not easy to get started from scratch again, but it's much, much more preferable than working in a pharmacy in the UK. As my father used to say (about gambling) "it's a mug's game", and I've been a mug for too long.

Good luck to all of you who have left pharmacy. It was 100% the correct decision.

Imran Achar, Community pharmacist

You say pharmacy is bad. But what can newly qualifieds do? Most of my family did medicine and told me that this might be happneing.

Beta Blocker, Primary care pharmacist

Industry, hospital, general practice or something completely different. Remember the degree is a masters and its rigorous and therefore it's looked at favourably if you want to go into a completely different profession. Conversion course to law is also available.

Having said all that... it's a big jump if your going to go into another profession.

Peter Sainsburys, Community pharmacist

It was a big jump going into pharmacy. It was a much smaller jump leaving such a disgusting career and finding new work.

Marion Wells, Pharmacy Asistant/ Medicine Counter Assistant

Working short staffed is a major problem in Boots it puts massive strains on all departments ..too much expected of staff 

 

T

N Locum, Locum pharmacist

I work for Boots and I can tell you the working condition is getting worse and worse. They are constantly cutting down on staff with the usual explaination; according to the  ACI you are overstaffed. There are times when there are no staff on the shop floor (or even dispensers) that I am now having to deal with bulky transactions, refunds, boots.com orders, along with having to run back to my counter and take in Rx. self check it, sign up patients to our FRPS service and constantly having my store manager breathing down my neck on why we havent done any MURs that day. Ive only been qualified for 3 years and I'm now looking for a new job outside of pharmacy. I dont see any light at the end of the tunnel. Even with the additional NHS funding I doubt Boots will ever reinvest in more staff; the money will simply line the pockets of Walgreens shareholders. 

Meera Sharma, Primary care pharmacist

I do sympathise as you've described the scenario I was in in 2012! Glad to know Boots cares so much that this work practice is carrying on - hope PDA are reading these posts. Boots has got a lot to answer for.

A.S. Singh, Community pharmacist

If you're below the age of 27 I would re-train as a doctor or go into banking. Any old monkey can earn £50k just by working for an investment bank it seems

Beta Blocker, Primary care pharmacist

I wouldn't mind so much with the stress and bull***t if we got rewarded like bankers.... but there's no chance of that...

Beta Blocker, Primary care pharmacist

I got out in 2016 and haven't looked back.... best decision for me, my sanity and my family. I don't think it will get any better in community... get out while you still can would be my advice.

Dave Downham, Manager

Forgive my ignorance - what's"ACI"?

N Locum, Locum pharmacist

ACI- allocation of colleague investment. Its a tool Boots use to calculate the workload (dispensing, services etc) and then it works out the budget for store However as highlighted in the BBC programme its impossible for us to carry out the task they want us to do in the set time and staff given. Nobody knows how the ACI is worked out and every attempt to get answers from the superintendent pharmacsit during our annual 'lets connect conference' is rebuffed.

Many of my colleagues start early and leave late (unpaid hours) because we are inudated with the workload; they do this because they care for their patients. However the only real measure for care according to managerment is the number of MURs/NMS thats been delievered or "care conversations" they call it since the guardian article came out. 

Dave Downham, Manager

Thank you. Sounds just the kind of thing GPhC will be considering...

Richard MacLeavy, Non Pharmacist Branch Manager

I used to work at Boots and I know how ACI is calculated. Basically they have people time all the tasks that happen in pharmacy such as dispensing a single item, or handing out a prescription. By all tasks I mean the ones they think of when planning this exercise, when I was there it came out that no one measured dealing with phone calls or attempting to source out of stock medications as they had not thought to measure these. They measure the task several times and then take an average time. They then multiply this time by the amount of times your specific store has to perform this task - so for example they might find dispensing a single item takes 56 seconds, your store dispenses 1244 items on average a weeks so 19.35 hours are allocated for dispensing activity. Handing out takes an average of 34 seconds and on the assumuption that the average patient has 2.6 items that means 478 hand outs happen at 34 seconds each so 4.51 hours is allocated for handing out. Add up all the task times gives you a total sum for the store and subsequently the business as a whole. Now the crucial bit, they then match this against the payroll sum allocated to the business as a whole and the model will take this and allocate it proportionately to each shop based on the task timeings. Its important to know this payroll sum is always lower than the payroll needed to perform all the tasks. This funding gap is refered to as the "productivtivity gap", you may of heard managers talk about this. I found when I was there this gap increased each year from about 8% to 15%, so in essentence they intend to underfund/understaff the pharmacy, even there own model shows it. In addition the model is fundamentally flawed due to 

1. Many tasks have fotten to be considered and therefore no times have been allocated to these tasks

2. Timings are measured on competent staff so in effect trainees are given no extra time even though they won't be as effeicient. 

3. Loads of calculations are based on assumptions such as your average patient has 2.6 items per collection which may or may not be true. Also it assumes tasks can be performed in a linear fashion which of course is wrong. What I mean by that is the timings taken give no indication of when tasks may need to be performed together such as a patient may need a boots.com collection and another might need an rx filled at the same time. The model has no way of accounting for this hence why 1 person can get overwhelmed by customers and wonder why the model doesn't demand 2 staff be present. Quite simply it cannot account for anything being done in a non linear fashion which is clearly rediculous. 

4. Timings will be adjusted following "simplification" however any new tasks will not be added. So for example when I was there they automated the pharmacy stamp and calculated this saved a second off each prescription item (which in itself seems unlikely to have saved that much time) however on introducing PIF's no additional time was allocated for this task.

5. The model doesn't allow time for moving bettween tasks, so for example in many stores you might be expected to work in pharmacy but also sell fragrance, or operate the photo lab too even if this is the other side of the store. The model does not provide time allocation for walking from the pharmacy to the photo lab/fragrance counter. 

6. The productivity gap is corporate way of saying underfunding gap. In effect it is the percentage they have underfunded you before you account for all the flaws in their model. 

7. Of course if your business is increasing effectively this gap also increases as the calculations will all be based on lower volumes of work.

 

Greg Lawton, Community pharmacist

This is a good description (though not commenting on the figures). There's some more information on it here https://www.chemistanddruggist.co.uk/feature/what-truth-behind-staffing-concerns-boots

The alternative name for the "productivity gap" is "windback", though in company documents they stopped using that terminology and called it "productivity challenge" (you can probably guess the reasons).

Beyond these "time standards" there were principles in the model too - for example to provide funding for an RP for all of the pharmacy's opening hours (though due to windback, many pharmacies weren't even being provided with that through the part of the model that allocated it, so they would have to borrow from elsewhere).

One of the other issues with the timings is that they were done by observing people working under the conditions in the existing system - not necessarily people who are following all the steps of the SOP (and how could they follow them if they don't have enough time to do so?).

The company insists that its staff must follow its SOPs. Part of the work I was involved in in 2015 was to work out what staffing levels were needed to enable people to do that. External consultants called the method we used "world leading" and the company's own Operational Excellence team said it was "like comparing a Saturn 5 rocket with a flint tool". It was different to the method described above and accounted for interruptions, unavoidable human error, changing targets etc. Some people didn't seem to like the answers it gave though.

 

Meera Sharma, Primary care pharmacist

That answers a lot of questions - we all suspected this and no wonder no-one at management level shares how this pathetc model is calculated. It is fundamentally flawed, doesn't model on "real life" in stores, and is purely used to squeeze stores and pharmacists. If a pharmacist behaved like this, GPhC would have them at a FtP hearing in no time - so where does one report management that behaves like a slave driver??!

Dineshkumar Ganatra, Community pharmacist

It's interesting how ALL comments on workload pressure are directed at the employer (Boots, in this case). None of the anger is directed at DOH/NHS payments system, who instigated such pressures in the first place

Dave Downham, Manager

An early test for the PDA?

Imran Achar, Community pharmacist

So what you're basically saying is that they use an unrealistic model to determine how many staffing hours you are allowed. They know full well what is going on so it's basically akin to a scam.

Richard MacLeavy, Non Pharmacist Branch Manager

Im not sure thats right. Have you met some of the senior managers at Boots? We can see the model is fundamentally flawed as we have applied logic, rational thinking and inteligence to our discussion. The same cannot be said for all of the senior leaders in Boots. I'm sure they think its a fantastic model. After all their management consultants told them so and having none of their own pharmacy knowledge whos to know it doesn't work. 

 

Peter Sainsburys, Community pharmacist

It might seem scary leaving pharmacy after all that training, but I can assure it's not as scary as continuing in the current environment. There are loads of jobs you can do with a Master's degree, but you may have to start at the bottom. If you remove your name from the register and go and do something else, you won't look back.

Workplace pressure is still increasing, and this surely is a patient safety issue. However, the regulator who is mandated to protect the public still isn't doing anything about it, I have zero faith that they will ever do anything to resolve it.

With the pressure, outrageous workload, bullying tactics, ridiculous service targets, lack of proper breaks, poor wages which seem to still be going down despite what C+D say, and the new revalidation etc, it really doesn't seem worth it anymore.

Saddened Old Timer, Community pharmacist

Nothing to do with having no staff to serve in the shops then ? Nothing to do with not enough support staff who are also appropriately trained to help patients in Pharmacy?

N O, Pharmaceutical Adviser

You gain some and you lose some. In this case 4% gain against 1.7% decline. But, if we conver these %s to value ($£$£$£) then I'm sure the 1.7% willbe 0.0017% of the 4%. Just cinical.

A LOCUM, Community pharmacist

even though their pharmacists and dispensers take over training evenings they never have anyone who can do ehc , smoking cessation , needle exchange ,healthy start vitamins , but plenty sandwiches make up and pop 

SIMON MEDLEY, Community pharmacist

drop in rx volume ! ours is still going up

Peter Sainsburys, Community pharmacist

Preumably you own in independent? No doubt you have much better customer service.

Peter Sainsburys, Community pharmacist

Couldn't possibly be related to the expose about how they treat their staff?

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