Boots is expected to shutter a number of stories in Northern Ireland over the next year as part of a wider plan by the group to close around 300 outlets across the UK.
The decision was announced on Tuesday after the pharmacy retailer’s parent group, Walgreens Boots Alliance, slashed its earnings forecast for the year amid weak demand for Covid-related services and “more cautious and value-driven” behaviour among consumers against the backdrop of rampant inflation.
Boots reported a 6.9 per cent increase in footfall in the year and a 25 per cent increase in digital sales. But the wider group reported a small decline in same-store sales at its retail division compared with estimates of a 2.1 per cent increase.
The group’s net profits fell 59 per cent to $118 million (€108m) in the quarter to May 31st despite an 8.6 per cent uptick in sales to $35.4 billion.
The group has been implementing a transformation programme over the past number of years in a bid to rejuvenate the brand and its store portfolio.
Boots said on Tuesday that over the next year it will also look to “consolidate a number of stores” that are in “close proximity to each other”. James Kehoe, the group’s executive vice-president and head of global finance, confirmed the cuts on an earnings call.
It is understood that some 300 Boots stores will closed over the next 12 months – the vast majority of which are said to be within 5km of each other – a small number of them in Northern Ireland. Around 150 Walgreens outlets are also expected to close.
Boots operations in the Republic are unaffected by the announcement.
No redundancies are proposed, and it is expected that all employees affected by the announcement will be offered a redeployment opportunity within the business.
Walgreens now expects adjusted earnings per share of $4 to $4.05 in 2023 from $4.45 to $4.65 previously.
“Significantly lower demand for Covid-related services, a more cautious and value-driven consumer, and a recently weaker respiratory season created margin pressures in the quarter,” said chief executive Rosalind Brewer in a statement on Tuesday. “Our revised guidance takes an appropriately cautious forward view in light of consumer spending uncertainty, while still demonstrating clear drivers of a return to operating growth next fiscal year.”
