Boots is set to cull 4,000 jobs following a sharp dip in sales during the coronavirus crisis.
The losses mean that Boots will chop 7 per cent of its workforce, and these will be made across the firm’s stores, opticians and head office headcount. It says the consultation process for the redundancies is already underway with staff.
With the pressures from the COVID-19 crisis piling on top of the woes of a high street already experiencing a reduced footfall and spiralling ground rents, retail executives will be keeping a close eye on whether the measures being taken by Boots are successful.
Boots – owned by US pharmacy giant Walgreens – says it plans to shutter 48 of its optician outlets. This is following the revelation that its sales for its opticians business dropped by 72 per cent during the health and Beauty retailer’s third quarter, while overall like-for-like sales year-on-year dropped by almost half.
The majority of Boots stores remained open during the lockdown period, but the profitable beauty and fragrance departments were shut down. Its larger city centre, airport and station outlets were also closed, hurting the retailer’s revenue significantly.
But the restructuring plan is clearly necessary: the gradual reopening of the high street in recent weeks will bring back potential revenue streams, but Boots said in a statement that: “it is anticipated that the high street will take considerable time to recover”.
UK managing director, Seb James, said: “The proposals announced today are decisive actions to accelerate our transformation plan, allow Boots to continue its vital role as part of the UK health system, and ensure profitable long-term growth. In doing this, we are building a stronger and more modern Boots for our customers, patients and colleagues.
“We recognise that today’s proposals will be very difficult for the remarkable people who make up the heart of our business and we will do everything in our power to provide the fullest support during this time.”
But Boots, which has been a stalwart of the British high street since the mid-19th century, is showing the retail sector’s leaders that even the oldest of retail companies must face a new retail landscape. Its restructuring plan shows it will turn boldly into the market headwind it’s now facing. This means embracing new ways of selling, despite its high street losses, Boots’ online sales have climbed by more than three-quarters during lockdown.