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18 Apr 2018

Trusted pharmacy networks still relevant, insists Walgreens Boots

Trusted pharmacy networks still relevant, insists Walgreens Boots
Stefano Pessina, Executive Vice Chairman& Chief Executive, Walgreens Boots Alliance
Physical pharmacy stores are not under immediate threat from the growth of pure online retailers like Amazon, said the Executive Vice Chairman and Chief Executive of Walgreens Boots Alliance on Thursday 18 April.

“I believe it will take many years for them [Amazon] to enter the pharmaceutical market,” Stefano Pessina told the World Retail Congress in Madrid, citing recent comments from Amazon ruling out selling pharmaceuticals. “This is a very regulated market. They decided not to deliver alcohol because it is regulated, so you can imagine us.”

Pessina now oversees 13,000 retail stores in 11 countries after starting out in the mid-1970s with a family pharmaceutical business in his home country Italy. The company, employing  385,000 people, has acquired and merged companies including British brand Boots and US brand Walgreens. The group makes revenues of $120 billion.

In December, Walgreens Boots announced it would take a 40% stake in Chinese pharmacy chain operator Sinopharm Holding GuoDa Drugstores Co Ltd. Pessina said GuoDa, which operates and franchises 3,500 retail pharmacies across 70 cities in China, wants to open yet more stores.

“I don’t want to minimise importance of the online business, but in the end it is always important to have a direct contact with people,” said Pessina. He said the pharmacy sector worldwide had an efficient network with populations served by pharmacies nearby and that was still fundamental, with 75% of those buying online from Boots in the UK collecting their products at a store.

Nevertheless, Pessina pushes staff to keep evolving. The company is trialling a new format in Florida’s Wallgreens. “We know we have to change the format and to evolve,” said Pessina. “The pilot is much more focused on the needs of the customers, with more services, better prices and a more focused choice.

“I am always telling my people: you have to be willing to change, and to change and to change again.”

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