Wednesday, June 3, 2020

Store closures possible as Boots suffers difficult quarter

The US owner of Boots has said that some UK shops could close as it attempts to cut costs.

In the UK, after a “difficult quarter,” comparable pharmacy sales decreased 1.5 percent and comparable retail sales decreased 2.3 percent.

Executive Vice Chairman and CEO Stefano Pessina said: “The market challenges and macro trends we have been discussing for some time accelerated, resulting in the most difficult quarter we have had since the formation of Walgreens Boots Alliance.

“During the quarter, we saw significant reimbursement pressure, compounded by lower generic deflation, as well as continued consumer market challenges in the U.S. and UK.

“While we had begun initiatives to address these trends, our response was not rapid enough given market conditions, resulting in a disappointing quarter that did not meet our expectations. As a result, we are now expecting roughly flat adjusted EPS growth for fiscal 2019.

“We are going to be more aggressive in our response to these rapidly shifting trends. We are focusing on our operational strengths and addressing weaknesses, making a number of senior appointments to bring change and accelerating the digitalization and transformation of our business.

“This will include expediting the execution of our partnership initiatives, fully developing our in-store neighborhood health destinations, re-imagining our front end retail offering, optimizing our store footprint and increasing the annual savings goal of our transformational cost management program from in excess of $1 billion to more than $1.5 billion. As a result of these actions, our business model will deliver improved performance in fiscal 2020, positioning us for mid-to-high single-digit growth in adjusted EPS in the following years.”

The news follows the revelation that hundreds of jobs were at risk in Boots’ Nottingham head office.

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