Boots (and walgreen)
Discussion
Boots to get a new owner, a US venture capitalist company snapping it and its US arm walgreens for $10bn which seems like a bargain on the face of it having 13k plus stores between them and $147bn in sales but the US pharmacy industry is in crisis. Prepare for a typical corporate raid and deterioration of customer service at Boots.
https://www.bbc.com/news/articles/cdxq0p27z69o
Lost a few hours overnight going down the rabbit hole of US pharmacy chains. Interesting story once you are not a shareholder! Boots merged with walgreens (9,000 stores in the US) in 2012 which has proven a disaster due to timing of the opioid crisis as walgreens have been partially blamed and have been making large settlements with US states. Competition from online and walmart has also been very damaging. Internally management went on a buying spree loading the company with debt. Since 2015 their share price has fallen from $85 to $10.
The whole US pharmacy industry is the same, huge amount of store closures from the other giants like CVS and Rite Aid all with the same problems. All their business models are outdated, walk into these stores and they are a cross between a medium sized convenience store and a pharmacy except the convivence store part is really outdated and expensive and apparently theft is huge which leads to locking things away which itself detracts customers.
Maybe on a positive front, we might see some growth in owner operated pharmacies in the Uk which would be a good thing.
https://www.bbc.com/news/articles/cdxq0p27z69o
Lost a few hours overnight going down the rabbit hole of US pharmacy chains. Interesting story once you are not a shareholder! Boots merged with walgreens (9,000 stores in the US) in 2012 which has proven a disaster due to timing of the opioid crisis as walgreens have been partially blamed and have been making large settlements with US states. Competition from online and walmart has also been very damaging. Internally management went on a buying spree loading the company with debt. Since 2015 their share price has fallen from $85 to $10.
The whole US pharmacy industry is the same, huge amount of store closures from the other giants like CVS and Rite Aid all with the same problems. All their business models are outdated, walk into these stores and they are a cross between a medium sized convenience store and a pharmacy except the convivence store part is really outdated and expensive and apparently theft is huge which leads to locking things away which itself detracts customers.
Maybe on a positive front, we might see some growth in owner operated pharmacies in the Uk which would be a good thing.
Edited by acer12 on Friday 7th March 09:17
I don't think there will be many more owner operated pharmacies in the UK.
The NHS controls very carefully the competition that is allowed?, So the only growth chains can easily get is to buy existing units.
My daughter is a hospital Pharmacist but has contacts in "community"
The big savings will come from automated order fulfillment.
When your repeat prescription goes to an offsite facility and is put directly into a bag, which is delivered to the shop the next day. This reduces the need for the lesser staff in each shop. And reduces the amount of stock.in the shop.
The NHS controls very carefully the competition that is allowed?, So the only growth chains can easily get is to buy existing units.
My daughter is a hospital Pharmacist but has contacts in "community"
The big savings will come from automated order fulfillment.
When your repeat prescription goes to an offsite facility and is put directly into a bag, which is delivered to the shop the next day. This reduces the need for the lesser staff in each shop. And reduces the amount of stock.in the shop.
Boots is a bit of a basket case. I did some work for them last year and I wouldn't want to invest in it. Walgreens have been trying to offload Boots for years but haven't find a buyer and I think there's a reason for that which is a lack of profitability and they're in a declining sector (UK retail and pharmacy on the high street).
Pit Pony said:
I don't think there will be many more owner operated pharmacies in the UK.
The NHS controls very carefully the competition that is allowed?, So the only growth chains can easily get is to buy existing units.
My daughter is a hospital Pharmacist but has contacts in "community"
The big savings will come from automated order fulfillment.
When your repeat prescription goes to an offsite facility and is put directly into a bag, which is delivered to the shop the next day. This reduces the need for the lesser staff in each shop. And reduces the amount of stock.in the shop.
Certainly the experience around here, I can only think of 1 owner-operated pharmacy within 5 miles, all the others have been swallowed up by either the local chains or they’ve turned into one of hundreds of small Boots stores. It’s got to the stage where in places like Airdrie you’ve got a traditional Boots shop on one side of the main shopping street, a pharmacy opposite and two more round the corner, literally on the same street (albeit the street name changes half way). Why some of these haven’t closed is beyond me but I wouldn’t be surprised if there’s some sort of payment coming from the NHS to keep them open.The NHS controls very carefully the competition that is allowed?, So the only growth chains can easily get is to buy existing units.
My daughter is a hospital Pharmacist but has contacts in "community"
The big savings will come from automated order fulfillment.
When your repeat prescription goes to an offsite facility and is put directly into a bag, which is delivered to the shop the next day. This reduces the need for the lesser staff in each shop. And reduces the amount of stock.in the shop.
Pit Pony said:
I don't think there will be many more owner operated pharmacies in the UK.
The NHS controls very carefully the competition that is allowed?, So the only growth chains can easily get is to buy existing units.
My daughter is a hospital Pharmacist but has contacts in "community"
The big savings will come from automated order fulfillment.
When your repeat prescription goes to an offsite facility and is put directly into a bag, which is delivered to the shop the next day. This reduces the need for the lesser staff in each shop. And reduces the amount of stock.in the shop.
The vast majority of pharmacies in the UK are owner operated/chains of 5 or less. 2023 data here: https://www.chemistanddruggist.co.uk/CD137284/Davi... This trend has continued. The NHS controls very carefully the competition that is allowed?, So the only growth chains can easily get is to buy existing units.
My daughter is a hospital Pharmacist but has contacts in "community"
The big savings will come from automated order fulfillment.
When your repeat prescription goes to an offsite facility and is put directly into a bag, which is delivered to the shop the next day. This reduces the need for the lesser staff in each shop. And reduces the amount of stock.in the shop.
The largest chain is Boots, with c2,000 pharmacies. The next largest is Well, with c700 pharmacies, who are owned by the Bestway wholesale business. After them it's Rowlands with 350 stores, who are owned by the giant German pharmacy business Phoenix. The rest is a long chain with many independents.
As a sector in the UK, pharmacy is hugely up against it. the majority of what pharmacies do (i.e. 90+%) is dispensing prescriptions. They get paid to do this by the NHS. The NHS funds pharmacy with a total sum going into the market each year (with variations between each of the devolved nations). The global sum is £2.6bn each year. This has remained flat since 2019 in spite of (1) the inflation (particularly people costs) seen in that time and (2) rising volumes of prescriptions.
The model is biased against large operators who have central overheads required to run store estates of several hundred locations as it does not allow for that. Remarkably, versus other sectors, scale is a disadvantage. All the larger operators are selling stores. Automated prescription fulfillment helps to manage costs, but it doesn't touch the sides in reality.
This is a good deal for Walgreens. They've already sold Alliance (the UK's largest pharmacy wholesaler). My prediction is that the Boots community pharmacies will now all be sold to the independent sector and the new owners will focus on the destination stores.
alangla said:
Certainly the experience around here, I can only think of 1 owner-operated pharmacy within 5 miles, all the others have been swallowed up by either the local chains or they’ve turned into one of hundreds of small Boots stores. It’s got to the stage where in places like Airdrie you’ve got a traditional Boots shop on one side of the main shopping street, a pharmacy opposite and two more round the corner, literally on the same street (albeit the street name changes half way). Why some of these haven’t closed is beyond me but I wouldn’t be surprised if there’s some sort of payment coming from the NHS to keep them open.
You have to have a licence from the local health board to open a pharmacy. These are based on number of heads of population, i.e. restricted numbers with no new licences being created generally. Operators will therefore keep two stores to prevent a competitor coming in with a new licence application (or buying the licensed location). Perfectly legal even if commercially bonkers. Quhet said:
Boots strikes me as being pretty similar to WH Smiths. Once well respected and trusted brands which have declined massively. The in-store shopping experience for both is dire.
Absolutely spot on! They both only make any money in railway stations and airports etc too, I don’t think either of them have got much of a future on the high street.EDIT - you answered while I was typing this!
OMITN said:
Pit Pony said:
I don't think there will be many more owner operated pharmacies in the UK.
The NHS controls very carefully the competition that is allowed?, So the only growth chains can easily get is to buy existing units.
My daughter is a hospital Pharmacist but has contacts in "community"
The big savings will come from automated order fulfillment.
When your repeat prescription goes to an offsite facility and is put directly into a bag, which is delivered to the shop the next day. This reduces the need for the lesser staff in each shop. And reduces the amount of stock.in the shop.
The vast majority of pharmacies in the UK are owner operated/chains of 5 or less. 2023 data here: https://www.chemistanddruggist.co.uk/CD137284/Davi... This trend has continued. The NHS controls very carefully the competition that is allowed?, So the only growth chains can easily get is to buy existing units.
My daughter is a hospital Pharmacist but has contacts in "community"
The big savings will come from automated order fulfillment.
When your repeat prescription goes to an offsite facility and is put directly into a bag, which is delivered to the shop the next day. This reduces the need for the lesser staff in each shop. And reduces the amount of stock.in the shop.
The largest chain is Boots, with c2,000 pharmacies. The next largest is Well, with c700 pharmacies, who are owned by the Bestway wholesale business. After them it's Rowlands with 350 stores, who are owned by the giant German pharmacy business Phoenix. The rest is a long chain with many independents.
As a sector in the UK, pharmacy is hugely up against it. the majority of what pharmacies do (i.e. 90+%) is dispensing prescriptions. They get paid to do this by the NHS. The NHS funds pharmacy with a total sum going into the market each year (with variations between each of the devolved nations). The global sum is £2.6bn each year. This has remained flat since 2019 in spite of (1) the inflation (particularly people costs) seen in that time and (2) rising volumes of prescriptions.
The model is biased against large operators who have central overheads required to run store estates of several hundred locations as it does not allow for that. Remarkably, versus other sectors, scale is a disadvantage. All the larger operators are selling stores. Automated prescription fulfillment helps to manage costs, but it doesn't touch the sides in reality.
This is a good deal for Walgreens. They've already sold Alliance (the UK's largest pharmacy wholesaler). My prediction is that the Boots community pharmacies will now all be sold to the independent sector and the new owners will focus on the destination stores.
Alliance you say. My regular 3 to occasionally 5 prescriptions come via what was a Rowlands who (in conjunction with the GP) were so slow that I'd order my next 28 days prescription as soon as I started using the 1st tablet from last batch. I initially thought the fault lay with the GP but....
Rowlands have sold out that particular shop to Alliance and it now takes 3 working days instead of 10, so the bottleneck was not the GP.
The other thing to note is they've got rid of the make up and perfume counters and the 3 part time staff which means that the only 1/3 of the floor space is being utilised. I'm thinking it's perfect for subletting.
A few years ago pharmacies used to sell all sorts of stuff, Boots had a large shop in the high street, downstairs was mostly the chemist and things like cosmetics, some food and so on, upstairs they sold toys and household things as well as photography.
Now it is more than half the size, they still sell cosmetics, and things like shampoo, sun lotion and so on. Not been in for years.
Neither have I been in to M&S since they closed in the high street
Now it is more than half the size, they still sell cosmetics, and things like shampoo, sun lotion and so on. Not been in for years.
Neither have I been in to M&S since they closed in the high street
tribalsurfer said:
They should rebrand as Walgreens and try to ignite the spark. When in the States, Walgreens/CVS always seem to just be a more enjoyable place to be than Boots.
I think Boots need to split from walgreens, walgreens needs major surgery hence the firesale price. Worst case scenario is the new owners devote all of their time / $s to fixing walgreen and neglect boots, their rescue fails and all thats left is a company with huge debt and a worse off customer reputation and a destroyed brand. Its been the rinse and repeat of lots of once famous US bricks and mortar chains (from restaurant to supermarkets) who get bought out frequently and loaded with debt, every VC wants a go at raiding them then fold them and move them on again.Oliver Hardy said:
A few years ago pharmacies used to sell all sorts of stuff, Boots had a large shop in the high street, downstairs was mostly the chemist and things like cosmetics, some food and so on, upstairs they sold toys and household things as well as photography.
Now it is more than half the size, they still sell cosmetics, and things like shampoo, sun lotion and so on. Not been in for years.
Neither have I been in to M&S since they closed in the high street
The high street pharmacy fundamentally hasn't changed its offering since the dawn of time, whereas everyone else has moved on. They've had their lunch eaten on the adjacent products by other retailers and the grocers. Indeed the grocers only use pharmacy as a footfall driver - they are generally making a loss on the pharmacy offering in their stores.Now it is more than half the size, they still sell cosmetics, and things like shampoo, sun lotion and so on. Not been in for years.
Neither have I been in to M&S since they closed in the high street
My prediction for Boots: all community pharmacy stores sold to independents. Brand to be focussed to health and beauty in the UK and sold off). Boots name to be taken overseas.
Pit Pony said:
Thank you for that. All my preconceptions smashed. Ah well.
Alliance you say. My regular 3 to occasionally 5 prescriptions come via what was a Rowlands who (in conjunction with the GP) were so slow that I'd order my next 28 days prescription as soon as I started using the 1st tablet from last batch. I initially thought the fault lay with the GP but....
Rowlands have sold out that particular shop to Alliance and it now takes 3 working days instead of 10, so the bottleneck was not the GP.
The other thing to note is they've got rid of the make up and perfume counters and the 3 part time staff which means that the only 1/3 of the floor space is being utilised. I'm thinking it's perfect for subletting.
There's a new chain of pharmacies called Alliance Pharmacy that's been set up which is buying up former Lloyds pharmacies and some former Boots branches, but as far as I'm aware that's nothing to do with the Alliance (formerly Unichem) wholesaler chain.Alliance you say. My regular 3 to occasionally 5 prescriptions come via what was a Rowlands who (in conjunction with the GP) were so slow that I'd order my next 28 days prescription as soon as I started using the 1st tablet from last batch. I initially thought the fault lay with the GP but....
Rowlands have sold out that particular shop to Alliance and it now takes 3 working days instead of 10, so the bottleneck was not the GP.
The other thing to note is they've got rid of the make up and perfume counters and the 3 part time staff which means that the only 1/3 of the floor space is being utilised. I'm thinking it's perfect for subletting.
OMITN said:
Oliver Hardy said:
A few years ago pharmacies used to sell all sorts of stuff, Boots had a large shop in the high street, downstairs was mostly the chemist and things like cosmetics, some food and so on, upstairs they sold toys and household things as well as photography.
Now it is more than half the size, they still sell cosmetics, and things like shampoo, sun lotion and so on. Not been in for years.
Neither have I been in to M&S since they closed in the high street
The high street pharmacy fundamentally hasn't changed its offering since the dawn of time, whereas everyone else has moved on. They've had their lunch eaten on the adjacent products by other retailers and the grocers. Indeed the grocers only use pharmacy as a footfall driver - they are generally making a loss on the pharmacy offering in their stores.Now it is more than half the size, they still sell cosmetics, and things like shampoo, sun lotion and so on. Not been in for years.
Neither have I been in to M&S since they closed in the high street
My prediction for Boots: all community pharmacy stores sold to independents. Brand to be focussed to health and beauty in the UK and sold off). Boots name to be taken overseas.
Both my grandfather (who I never knew) and my father were pharmacists. Dad often used to say, quite correctly, that a good independent should be able see off a multiple. But even he would be surprised at the demise of Boots, who were formidable competitors in their day.
As was alluded to in this thread, pharmacies in England urgently need a decent settlement from the NHS as the money from the core work of dispensing prescriptions hasn't been increased for five years. I've heard of pharmacist owners increasing the mortgages on their houses in order to keep their pharmacies going and of businesses going under. This never used to happen.
I was quite happy to finish work at age 60, and as my wife says-"we got out at the right time"
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