Traditional and well-established retailers continue to struggle. The list is endless. The latest icon of the high street to experience difficulties is our old friend Boots.

This company operates over 2,500 outlets in the UK market.

It was founded in 1849 by John Boot in Nottingham. It has undergone many changes of ownership over the years. Significant developments included a merger with Alliance Unichem in 2006. In 2007 it was bought by Kohlberg, Kravis Roberts and Stefano Pessina and it moved its headquarters to Switzerland.

In 2012 Walgreens, the largest USA chemist chain purchased a 45% stake in the company.

In 2014 it exercised its option to purchase the remaining stake and Boots became a subsidiary.

Trading as Boots in the UK, the company has three strings to its bow: the chemist business, the optician business and its retail international development operations.

Over the decades it has also operated an R&D business. For instance in the 1980’s it developed the painkilling drug called Ibuprofen.

In terms of brand identity and equity it can be argued that Boots captures the market for trust and confidence in its products among the older demographic in the UK. It is largely seen as a retailer that offers competitive prices, particularly among the price conscious segments in the health and beauty sectors.

Walgreens as part of its global operations has sets itself a target of reducing its costs by $1 billion across its portfolio of businesses globally. This was driven by the need to offer lower prices and better service to its customer base.

This naturally has had an impact on Boots.

In May 2019 it announced that it was reviewing its portfolio of over 2,500 outlets in the UK and the Irish market.

Despite its strong brand presence in the market and the high degree of trust in the brand, Boots has experienced a slowdown in the last couple of years. It recorded a 20 per cent decline in full-year pre-tax profits in 2018.

Retail experts blame this reduction in performance on the usual suspects: the trend to online shopping, the inexorable rise in business rates, higher minimum wages that have to be paid to comply with UK government regulation and the drop in value of the pound due to ongoing uncertainty over Brexit.

In addition to the above factors, it can also be argued that Boots has experienced ever-increasing competition from retailers such as Savers, Poundland and Home Bargains. That other agile price-centred retailer, Primark, has also moved into this sector.

Boots, like many of the similar well-established retailers in various sectors, has struggled to respond and in particular identify the new brands that have gained favour with online shoppers as a consequence of being recommended on social media platforms by key social media influencers.

The health and beauty sector throws up its own peculiarities in my view. Much of the items that fall into this category arguably are not needed by consumers – certainly the higher end items (in terms of price).

As is the case in many retail sectors, the prolonged recession of the last decade has conditioned previously less price-conscious shoppers to make visits (online and in person) to the discount retailers. Health and beauty is no exception. Savers and Primark are very active in these sub-categories and the previous advantages of having a strong brand equity with high levels of trust, have been eroded over time and are threatening the “comfort zone” of retailers like Boots.

The 2,500 retail outlets arguably cemented the position of Boots in the high street and in shopping centres. In an era where all retailers have to question the logic of having so many bricks and mortar outlets, Boots is no exception.

It is further complicated by the fact that many of these outlets would be designated as being “small” in terms of space.

Boots also has to grapple with the perennial challenge of enhancing the customer experience in such shops. To be fair, it has a reasonably impactful website and has operated its Boots Advantage loyalty card for many years. While arguably not keeping up to the fullest extent with changing trends in beauty products, it has the essential online architecture already in place to rejuvenate its online presence.

It’s bricks and mortar architecture is more problematic. With rises in wages and business rates a seemingly unstoppable process, it arguably does not make sense to retain a portfolio of 2,500 outlets. Arguably the decision to look at 200 stores only for possible closure is not sufficiently strong enough to effect a major uplift in fortunes.

In defence of so many stores, senior management argue that people make over 800 million visits annually. That, in any person’s language is high-traffic density! Also 90% of the UK population is within ten minutes of a Boots outlet.

Commentators have suggested that Boots is focusing its intentions on stores that are coming to the end of the expiry of leases. Also under the microscope are outlets located in towns where there is already more than one Boots outlet.

Recently Boots has begun to address the concept of enhancing the customer experience. It is undergoing an overhaul of 24 of its biggest “beauty halls” in 2019, with the aim to “win back relevance”. It is also planning to open a new flagship store in Covent Garden, London.

This “reinvention” will involve some major changes (by the standards of Boots). Traditional counters in the chosen beauty halls will be replaced by trending zones, discovery areas and live demonstration points. The focus will be on interaction and product immersion.

Two hundred beauty specialists will work alongside brand experts to drive these changes. Advice, guidance, demonstrations and engagement will be the order of the day.

Have we heard all of this before? In the case of many struggling retailers who want to recover their position in the market? Very much so in my view. Is it now too late to respond to the changing needs and requirements of the market? Possibly, in the case of Boots.

Sadly for them more illustrious retailers, in terms of higher-end beauty products, are experiencing the so-called “showroom” effect. Beauty halls in retailers such as Harvey Nichols are not making as much use of beauty advisors and consultants. They are finding that customers make use of the expert advice but make their purchases on online websites that offer the same brands at considerably lower prices.

While Boots is not so dependent on the higher end items, it still could find itself in a vicious circle: where it provides high levels of expertise and yet loses sales to online websites.

In a quest to improve its competitive position it has entered into a twelve-month partnership with Glamour and it is sponsoring the latter’s live beauty festivals in London and Manchester. This provides an opportunity for shoppers to preview the latest, trending beauty products.

Boots plans to launch twenty beauty products in the next year, alongside eight hundred and fifty general products.

Let’s monitor developments at Boots over the coming months? Will it recover its prominent position or slip into mediocrity?