Alliance Boots, the multifunctional global retailer and wholesaler, one that dominates the United Kingdom’s retail drug store segment, towers over Europe’s wholesale drug business and brings to the international retail community one of the planet’s dominant and most respected consumer goods brands, has been named the 2009 Global Chain Drug Retailer of the Year by the editors of Chain Drug Review.


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Inside This Issue - News

Alliance Boots recognized as top global chain

January 4th, 2010

GLOBAL RETAILER OF THE YEAR:
Stefano Pessina, Alliance Boots

by David Pinto

LONDON – Alliance Boots, the multifunctional global retailer and wholesaler, one that dominates the United Kingdom’s retail drug store segment, towers over Europe’s wholesale drug business and brings to the international retail community one of the planet’s dominant and most respected consumer goods brands, has been named the 2009 Global Chain Drug Retailer of the Year by the editors of Chain Drug Review.

This award has been accorded Alliance Boots for the company’s unprecedented success in effectively combining the elements of drug store retailing, drug wholesaling and branded product marketing and distribution into one compelling package, elements of which have influenced and impacted businesses and consumers in some 20 countries on three continents.

Indeed, Alliance Boots has attained a status not previously seen by a company that combines drug retailing, wholesaling and consumer products marketing.

The success of Alliance Boots turns on a unique three-pronged strategy that focuses simultaneously on brand recognition and acceptance, retailing dominance, and wholesaling excellence.

These elements came together as never before in 2009, a year when Alliance Boots consolidated and expanded its retail dominance in the U.K. under the Boots brand while continuing to build its retail and wholesale drug businesses across Europe and into Asia and expanding both the range and international distribution of its branded offering, primarily under the Boots brand.

In the current fiscal year, this formula has brought Alliance Boots to unprecedented prosperity despite an economic climate that even the most optimistic economists would have to describe as difficult. In the six-month period that ended on September 30, Alliance Boots’ sales advanced 11.6% to some $15 billion.

In terms of the company’s individual businesses, Alliance Boots has consolidated its position in 2009 as the dominant drug chain in the U.K., operating more than 2,600 drug stores under the Boots logo, following the rebranding of nearly 1,000 outlets.

As well, Boots is the one of the leading drug chains in Norway, the Republic of Ireland and Thailand.

In total, Alliance Boots operates more than 3,200 health and beauty retail stores in nine countries around the world, some 3,000 of which contain pharmacies. The company’s associate and joint-venture stores now extend into such countries as Switzerland, Italy and China.

Additionally, Boots Opticians has emerged, after a major acquisition last year, as the No. 2 optical retail chain in the United Kingdom, with around 680 optical shops, some 200 of them franchised.

Meanwhile, the group’s Alliance Healthcare wholesaling division supplies merchandise to over 140,000 pharmacies, physicians, health centers and hospitals out of 370 distribution points in some 16 countries around the world.

Finally, the Alliance Boots roster of branded products, which it sells to retailers in America, Canada, Europe and Asia, includes such well-known names as the Boots No.7 cosmetics brand, Soltan, Botanics and, perhaps most spectacularly, No.7 Protect & Perfect Intense Beauty Serum, the recently introduced skin care product, which is said to provide long-term antiaging benefits.

In addition to the Boots brands, the group sells a range of generic medicines, under the Almus brand, in the U.K., France, Italy and Spain through its wholesaling unit.

So it is that Stefano Pessina, the group’s executive chairman, is able to state with confidence that “we are on track to become the world’s leading pharmacy-led health and beauty group with the strength, ability and drive to deliver for our customers, our people and the communities in which we operate.

“Our focus, going forward, will be on our two core business activities: pharmacy-led health and beauty retailing, and pharmaceutical wholesaling and distribution. As well, we’re working to internationalize the Boots brand by selling more Boots-branded products outside the U.K.”

At the core of Alliance Boots’ success is the company’s U.K.-based retail drug store business. In the year that ended last month, Boots UK completed the conversion and rebranding of almost 1,000 of its retail drug stores as “your local Boots pharmacy,” a conversion that further extended the already considerable dominance of the Boots retail brand in the U.K.

Supplementing and supporting the Boots drug chain in the United Kingdom are a world-class loyalty program marketed around the Boots Advantage Card, one that is actively used by some 16.5 million customers; a just-launched BootsWebMD consumer health and wellness online portal, in partnership with WebMD; and the availability of doctors’ surgeries, which are located in 10 Boots drug stores.

The web site boots.com, meanwhile, allows customers the option of ordering merchandise online and collecting it at the store.

Adding to and rounding out the activity of Alliance Boots in the U.K. is Central Home­care, a company Alliance Boots acquired last year, one that provides home health care services to U.K. patients who require management of complex drug therapies.

Though Pessina believes that the expense and logistics required to reproduce the Boots retail model across Europe would be both costly and impractical — “there are 10,000 independent pharmacies in Europe, making it difficult to create chains,” he says — he points to the more than 100 stores that the company operates in Norway (over half of which are branded Boots apotek), the 55 Boots stores in the Republic of Ireland, the retail pharmacy Boots apotheek test currently under way in the Netherlands and the group’s 160-store retail chain in Thailand as evidence that Alliance Boots knows how to run retail drug stores.

Meanwhile, there’s the Alliance Healthcare wholesale division, one that distributes products and services in 16 countries — including France, Spain, Italy, the Netherlands, Norway, Germany, Russia and the Czech Republic — in addition to the U.K.

Pessina, whose business background, expertise and experience are heavily oriented toward drug wholesaling, envisions Alliance Healthcare as an international business, one which, in the bargain, will become a vehicle for the international distribution of Boots-branded products, a brand currently distributed in 15 countries, including the U.S. (by CVS and Target) and Canada (where Shoppers Drug Mart sells it).

As a package, then, it’s clear that the group’s offering is supported by the most complete and formidable array of formats, products and services yet presented to a retail, medical and consumer community anywhere on the planet — certainly impressive enough to compel the editors of Chain Drug Review to name Alliance Boots the publication’s 2009 Global Chain Drug Retailer of the Year.

ALSO HONORED BY CHAIN DRUG REVIEW:

Retailer of the Year: Greg Wasson, Walgreens

Rx Exec of the Year: Kermit Crawford, Walgreens

Merchant of the Year: Joe Magnacca, Duane Reade

Lifetime Achievement Award: Andy Giancamilli, Katz Group

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