Ailing Boots searches for a way back to health

Linda J. Dodson

Boots’ move to sack more than 4,000 employees heaps yet more pain on the British high street, pushing the number of declared job losses due to coronavirus and the ensuing lockdown to more than 118,000. 

The pharmacy chain suffered a 48pc slump in sales this quarter due to Covid-19, with a 72pc drop in turnover at its Opticians branches. These will bear the brunt of the nearly 50 store closures.

The venerable chemist, founded in 1849 in Nottingham by John Boot, is not alone in reeling from the virus. Retail giants including John Lewis, Harrods and Topshop owner Arcadia are cutting jobs at a frightening pace.

Some argue that, like Boots, many of these companies were already in trouble. The pharmacy announced plans last year to axe 200 of its 2,465 stores and shed 350 staff at its Nottingham headquarters.

In the fourth quarter of 2019, before Covid-19 had hit, Boots posted a 2.1pc fall in sales. Pharmacy sales were down 1pc, while retail sales declined 2.7pc. Boots’ owner, US-based Walgreens Boots Alliance, said profits for the enlarged company were down by almost 10pc, primarily because of its lacklustre performance in Britain. Walgreens will take a $2bn (£1.6bn) hit on its UK arm as it downgrades its prospects for the foreseeable future.

So are the recent job cuts enough to save the embattled retailer? 

The chemist should not be struggling. A big chunk of its money comes from its stable pharmacy operations, the largest in Britain, as it collects fees from the NHS for prescriptions and other services such as vaccinations.

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