The Walgreens Boots Alliance (WBA) empire was created through the combination of the US drugstore giant Walgreens and the UK’s leading pharmacy retailer Alliance Boots in December 2014.
The merger created a global health and beauty business – with around 13,000 company-owned stores across nine countries and a significant wholesale presence. Its scale was given a boost in September 2017, when WBA agreed a $4.4bn (£3.2bn) deal to acquire 1,932 stores from US pharmacy rival Rite Aid.
In the UK, WBA has been re-investing funds in technology to up its digital capabilities. It has been focussed on building a “really seamless omnichannel offer” and developing a single customer view, while continuing to innovate in personalisation.
Boots remains the UK’s largest chemist chain by some margin, trading through around 2,200 pharmacy-led health and beauty outlets. But in an intensely competitive marketplace, sales have been sluggish across both its retail and pharmacy divisions in recent years.
Indeed, it embarked on a three-year cost-saving programme, from late 2018, on the back of “challenging market conditions”. And UK boss Sebastian James’ strategy, which is laser-focused on modernisation – revamping stores and upping Boots’ digital game to ensure brand relevance, appears to be paying off. UK sales rose 12% to £6,512m in the financial year to 31 August 2022 (FY2022), as the retailer swung back to the black with a pre-tax profit of £4m, from a £58m loss the previous year.
Recent strategic measures have included the closure of underperforming stores in a bid to stem falling sales and profits, while in mid 2020 Boots announced that it would be cutting 4,000 roles across its business as well as closing 48 Boots Opticians in the wake of a fall in sales during the coronavirus pandemic and to accelerate its transformation plan.
James continues to look at ways to differentiate the brand including an online pharmacy offering, express prescription pick-up trials, taking the Advantage Card loyalty scheme online and the overhaul of its largest beauty halls, which includes the rapid in-take of a raft of trendy, cult brands.
Boots further diversified from 2021 using the wealth of Advantage Card data at its fingertips to launch media and marketing agency, the Boots Media Group, which helps third-party brands deliver personalised campaigns to customers.
The retailer is part of WBA’s retail pharmacy international division. In addition to the UK network, this comprises some 1,760 stores across Europe, Latin America and Thailand.
Boots’ parent company is further shifting its focus to its core retail business following the announcement, in early 2021, that it has struck a deal to sell its Alliance Healthcare wholesale business.
Furthermore, the planned sale of Boots by WBA was shelved in mid June 2022 after prospective buyers failed to secure the financing necessary to meet the asking price. See Strategy
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