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Boots parent expects UK business to grow 6% in 2023

Pharmacy News

Boots parent expects UK business to grow 6% in 2023

Boots UK parent company Walgreens Boots Alliance has said it is “optimistic on the UK business” after shelving plans to sell it, and expects sales to grow by six per cent.

In a conference call with investors yesterday, WBA chief executive Rosalind Brewer set out projections for six per cent sales growth in the company’s 2023 fiscal year, which began in September.

The call came as Boots posted quarterly figures showing a 6.9 per cent year-on-year drop in pharmacy sales offset by a 15 per cent rise in retail sales.

Commenting on the growth of the company’s retail business, global chief financial officer James Kehoe said: “Over the last 12 to 18 months, a lot of high street retailers went bust, and we won all the market share. And these are very profitable categories.

He added: “We’ve completely shifted the business model in the UK onto online, so we have doubled the penetration that we had pre-Covid… it’s a completely different business with a different set of strengths”.

Mr Kehoe said the growth of sales has “more than compensated” for a drop in UK footfall that he characterised as a permanent development.

Investors heard “cost management” in WBA’s businesses outside America “has been very, very aggressive,” including a ‘transformational cost management programme’ in the UK that has seen “incremental store closures”.

Challenges facing the UK business include rising energy costs and a potential economic recession, said WBA.

WBA to ‘make a decision’ on Boots

Ms Brewer told investors about WBA’s efforts to sell Boots earlier this year, commenting: “We achieved a high level of interest, about eight to 10 interested parties… there were productive discussions with a wide range of individuals”.

“The markets turned on us and we went in another direction and decided to hold on to that asset.”

Ms Brewer may also have intimated that WBA could at some point in the future revisit its plans to sell Boots: “We’re going to work there in Boots and keep it strong until we make a decision there.”

Mr Kehoe added that WBA is “very focused on simplifying the company because it’s too complex for investors,” although he did not refer to Boots specifically. “We can’t say anything about any of our future actions,” he said.

Pharmacy Network News has approached WBA for clarification of these remarks.

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