The Boots chain of health & beauty stores is looking to cull as many as 200 outlets in its home UK market as its US parent embarks on a strategic review.
Walgreens Boots Alliance (WBA) says the Boots business saw profits fall 20 per cent to £398 million for the year to August 31. Sales slipped 0.8 per cent to £6.7 billion during the period.
Many of the Boots chain stores would close when their current leases expire. Others which are performing badly, would be shuttered more quickly, especially in smaller towns where there are two stores operating yet one would suffice.
WBA will review the future of 2500 stores worldwide, including about 200 in the UK, which is equivalent to about 10 per cent of Boots’ local network.
Patrick O’Brien, UK retail-research director at GlobalData, said the Boots closures are overdue.
“It has taken Boots a long time to address the midmarket squeeze that has wrought so much damage to major multichannel retailers in other sectors such as food, fashion and department stores. Shoppers have been trading down to discounters, and trading up to higher end retailers for more expensive treats and gifts,” he said.
“Like Tesco and M&S it has actually been in this predicament for years, but unlike them, it has done little to address the issue until very recently, and now we have to wonder if Boots has left it too late to halt its market share decline.”
O’Brien said a long-term lack of investment in stores has become more noticeable to shoppers.
“Its dated approach also extends to pricing, where multi-buy promotions and a generous loyalty scheme have made its shelf edge prices uncompetitive with discounters such as Aldi, Lidl and Savers, who have all been eating into its market share in health & beauty,” he concluded.