Walgreens Boots Alliance Inc (NASDAQ:WBA) will close 300 stores in the UK over the next year amid a shift to online shopping among the chemist’s customers.
Despite axing the number of its stores from 2,200 to 1,900, Boots will offer staff work at other locations rather than laying people off, according to reports.
Boots said the move was part of a “transformation plan” as customers switch to shopping online or choosing cheaper own-brand labelled products.
“Evolving the store estate in this way allows Boots to concentrate its team members where they are needed and focus investment more acutely,” the company said.
The move has fuelled speculation that Boot’s US owners could again be eyeing a break-up of the business, after having failed to secure a buyer for the pharmacy chain last year.
“Times have changed and UK PLC is still looking plenty ripe,” AJ Bell analyst Danni Hewson commented, “though there are renewed fears about recession.”
Walgreens Boots posted a 13.4% rise in sales at its UK business in Tuesday’s third-quarter results, with footfall jumping 7%, but online sales soaring 25%.
“Boots as a business has emerged from the pandemic invigorated, relevant and relatable,” Hewson added.
“It’s got to know its customer, has got a strong store footprint and its shelves are finally full of stuff that customers want.”
Commenting on the company’s earnings, she said: “It might be the kind of performance that fuels sleepless nights amongst members of the Bank of England but for its owners it could re-open the door on a potential sale.”