Boots announces closure of 300 stores

Health and beauty retailer Boots has made the decision to shut down 300 of its stores across the UK within the next year. This surprising move comes despite the company reporting stronger sales figures for the latest quarter. The closures will primarily affect stores that are located in close proximity to other sites, resulting in a reduction of Boots’ overall store estate from 2,200 to 1,900.

Boots has assured that no redundancies are planned as a result of this restructuring. Instead, the company intends to redeploy the affected workers. A spokesperson for Boots explained, “Evolving the store estate in this way allows Boots to concentrate its team members where they are needed and focus investment more acutely in individual stores with the ambition of consistently delivering an excellent and reliable service in a fresh and up-to-date environment.”

The chain’s decision to close stores comes alongside the announcement of its strong sales performance in the latest quarter. Boots experienced a surge in online shoppers and an increased preference for own-brand products, both contributing to the company’s success. Retail sales for the chain rose by 13.4% during the three-month period ending in May, compared to the same period last year.

Online sales played a significant role in driving this growth, with a 25% surge on the digital platform during the latest quarter. Boots highlighted the success of its “Everyday” essentials label, which features over 60 toiletries and personal care products sold for under £1.50. These products experienced a 40% increase in volume, indicating a preference for more affordable options amid the current economic climate.

Boots attributed the rise in sales to an increase in customer frequency, signifying a shift in consumer behaviour. This stands in contrast to other major personal care retailers such as Unilever, who have seen sales boosted primarily by higher prices rather than an increase in the number of items purchased.

Among the top-performing product categories, beauty products, particularly skincare items, saw an 18% increase in sales compared to the previous year. Additionally, May marked a significant milestone for Boots, recording the highest weekly sales for the beauty category outside of the Christmas season. Boots’ in-house brand No7 and its suncare range, Soltan, experienced strong demand during the quarter, likely due to the warmer weather.

The company’s pharmacy division also experienced growth, with sales increasing by 5.7%. This growth was driven by hay fever products and over-the-counter medication, including the successful launch of the erectile dysfunction range, Eroxon.

These developments come in the wake of Walgreens Boots Alliance (WBA), the parent company of Boots, witnessing a more than 50% decline in its net quarterly profit. The drop was attributed to reduced demand for Covid vaccines and testing.

Seb James, the managing director of Boots UK and ROI, expressed delight at the positive response from customers. He stated, “Our focus on offering our customers the best in healthcare and beauty, together with a continued commitment to great value, has been well received, and it is lovely to see more people choosing to shop with Boots. It is particularly pleasing to see our own brands proving popular, including an exceptional No7 performance.”