Boots' march out of town

Boots The Chemists is back on the out-of-town acquisition trail, according to regional property controller Philip Bell-Brown.

However, Bell-Brown said rising rents on retail parks could thwart the company's ambitions to achieve almost a third of its core sales away from the high street.

Bell-Brown, who is responsible for Boots' estate in the South, said that after a hiatus in 2001 and 2002, when it experimented with shop-in-shops in Sainsbury's stores, Boots is now targeting out-of-town stores again.

It is on target to make 20 acquisitions this year, he maintained.

The retailer has 170 non-high street stores - including 86 stores on retail parks, as well as others in transport nodes and health centres - against 1,382 on the high street. By 2007, Bell-Brown expects the number of high street stores to be virtually static, but the number of non-high street stores to have grown to 600.

However, rent is the biggest threat to this growth. In 1997, when Boots was beginning its out-of-town expansion drive, its average rent was£14.82 per sq ft (£159.50 per sq m). This year the average rent paid on new units is£25 per sq ft (£269 per sq m). On rent review the picture is worse: Bell-Brown said its average out-of-town rent-review settlement this year was more than£26 per sq ft (£279.75).

He pointed out to landlords: 'For every£1 increase in rent we face, Boots has to increase its sales by£11 per sq ft (£118.35 per sq m).'