Inside This Issue - Opinion
Visitors gain better grasp of Alliance Boots
October 22nd, 2012
by David Pinto
A small group of American suppliers journeyed to England earlier this month to learn about Alliance Boots, meet with that company’s senior managers, and attempt to gain a clearer understanding of some of the ways the Alliance Boots merger with Walgreens will influence the future of mass retailing in the United States and around the world.
Over three crowded and event-filled days, the U.S. businessmen visited several Boots drug stores, were briefed on the company’s far-flung pharmaceutical wholesaling business, and stopped at one of the 6,000 Alphega drug stores that collectively form the largest independent drug store network across Europe, a buying and operating group that was created, developed and built — and is managed — by Alliance Boots’ wholesale unit.
As well, the group toured one of the company’s distribution centers outside London, a unit that supplies merchandise to drug stores, hospitals, nursing homes and physicians’ surgeries across England’s south coast.
During the week the U.S. suppliers held extensive meetings with Alliance Boots’ senior executives, at which they were briefed on the progress of the Walgreens partnership and the plans and progress relating to the exchange of strategies and ideas and the exploration of opportunities going forward.
Finally, the American suppliers were given an extensive tour of Boots’ headquarters facility in Nottingham, and entertained at three dinners, one of which was hosted by Ornella Barra, chief executive of the company’s pharmaceutical wholesale unit.
At week’s end the traveling Americans had come away with these impressions:
• Alliance Boots’ wholesale business is much broader in reach, domination, scope and implications than had been previously imagined.
• Customer service, especially at retail, is a top priority at Alliance Boots, as evidenced by the number, professionalism, quality and dedication of the service personnel the company puts against the customer.
• Health care is a serious business at Alliance Boots, as evidenced by the fact that the Boots drug stores don’t sell tobacco or alcohol products.
• Within their individual disciplines, Alliance Boots’ senior managers combine a degree of expertise and enthusiasm with a willingness to share information that is seldom duplicated by U.S. retailers.
• The Boots brand is an icon in the United Kingdom, admired, respected and purchased by consumers across the country in numbers unimagined when viewed alongside American private label perception or performance. More impressive, it is quickly acquiring a global reputation for quality and value.
• Boots’ loyalty scheme is at once widely used, easily understood, highly valued and deeply respected by the U.K. consumer.
• For U.S. suppliers, Alliance Boots represents a global opportunity, rather than one limited to England or Europe.
• Boots is a lifestyle retailer, with an emphasis on healthy living rather than a more narrowly defined pharmacy-based retailer. As a result, the majority of retail sales come from the retailer’s front-store categories.
• The growth of Alliance Boots over the past decade has been staggering in both its speed and its impact. The 2006 acquisition of Boots by Alliance UniChem instantly gave the company a major U.K. retailing presence, while the Walgreens merger, just six years later, has brought the company to global prominence.
• Alliance Healthcare’s network of independent drug stores, under the Alphega banner, is Europe’s most powerful and significant group of independent pharmacies.
• The Boots range of retail formats across countries and continents is without equal in the retail drug store community.
In all, the American suppliers who visited Alliance Boots in early October, a third of whom were making their first trip to England, came away with a new understanding and appreciation of global retailing and the possibilities and opportunities that will shortly unfold in the Walgreens-Alliance Boots partnership.