Pharmacy-led health and beauty strategy

Boots is the largest pharmacy chain in Europe with an excellent reputation for differentiated health and beauty products and customer care. Our strategy is to develop Boots into the world’s leading pharmacy-led health and beauty retail brand, focused on helping people look and feel their best. The key steps we are taking in the UK to execute our strategy are as follows:

The key steps we are taking in the UK to execute our strategy are:

Making Boots more convenient and accessible for our customers. We opened 56 new Boots stores during the year of which 37 were relocations, and we refitted a further 119 stores. The trial with Waitrose to sell selective product ranges in each other’s stores is fully underway with 12 Boots stores now selling the Waitrose lunchtime food offering and a further seven stores incorporating a larger range of lunchtime and convenience food. In addition, Waitrose is selling Boots health and beauty products in 13 of their shops. The rebranding of Dollond & Aitchison optical practices as Boots Opticians was largely completed during the year with over 205 practices rebranded by the year end.

Developing our people to be at their very best for our customers. In addition to improving the product knowledge of our people through regular e-learning sessions, we are continuing to run a comprehensive leadership development programme and a Boots commercial academy, both aimed at ensuring that we have the best people supporting and developing our customer offer. We continue to recruit and train a substantial number of graduate pharmacists.

Improving our customers’ in-store shopping experience. This is being partly achieved by operating efficient walk-in prescription services staffed by friendly, knowledgeable and accessible pharmacists, and faster till service. Our customers’ experiences have also been enhanced by better in-store product availability following the investment in a more efficient logistics network, refitted stores, and redesigned store layouts to make it easier for customers to find what they want. We are also differentiating our retail formats and product offering to better meet the needs of our customers.

Creating a compelling multi-channel health and wellbeing consumer offering.  We continue to develop boots.com to make it easier for our customers to use. “Order-on-line and collect-in-store” is now available in nearly all of our 2,500 Boots stores across the UK, providing customers with convenient access to the extended Boots product range, including the full seasonal gift ranges. We are also continuing to develop BootsWebMD, our consumer health and wellness information portal launched in 2009/10 in partnership with WebMD, the leading US healthcare portal, with visitor numbers increasing significantly year on year.

Increasingly differentiating our product offering. We continue to launch new health and beauty product brands, while at the same time, enhancing our long established leading consumer product brands such as No7, primarily through new product development. During the year, we successfully launched Boots Pharmaceuticals, a new healthcare product brand bringing together 160 years of Boots expertise in developing trusted healthcare products for our customers. Boots Pharmaceuticals has the widest range of healthcare products of any brand in the UK. By the year end this new range had been expanded to cover over 400 different products, including therapeutically proven medicines, natural alternatives, vitamins and first aid products. In addition, we signed a number of new brand partnerships to develop and manufacture products to be sold exclusively at Boots, including the Champneys Spa brand.

Continuing to provide customers with excellent value. We provide customers with excellent value by providing trusted ranges of Boots branded products, executing strong promotional offers and rewarding customer loyalty with Boots Advantage Card points. The key steps we are taking in our international health and beauty markets to execute our strategy are:

Opening new stores in markets where Boots is already well established. This includes the Republic of Ireland, Thailand and Norway.

Developing country specific Boots branded trading formats to meet local needs. In December, we completed the roll-out of the ‘Boots apotek’ pharmacy concept in Norway and also during the year extended our test of the ‘Boots apotheek’ pharmacy concept in The Netherlands. Just before the year end, the first ‘Boots apotek’ pharmacy opened in Sweden on a franchise basis. We continue to evaluate franchise opportunities in other countries. In addition, we will consider, over time, establishing Boots pharmacy chains in new countries where legislation permits and it makes economic sense to do so.