Medicinal Compound

It was a quiet week until yesterday. True, there was a bit of speculation about Morrisons and Costcutter knocking about, but there's just speculation about that. No, yesterday saw a multiple story splash on the front page of the Retail Week website under the banner of "Deal of The Decade"


Yes, ladies and gentlemen, in these unprecedented weird times in retail, where we're all uncertain as nothing we used to know is true any more, the upcoming merger of Walgreens and Boots is about replace our old universe with something infinitely more complicated.

Am I getting carried away? Is this just an old retail geek getting over-excited? Well, it wouldn't be the first time, but there's some real beauty in this deal.

Walgreens are a great business - their model was looked at a while back by Tesco and we incorporated some of their concepts into the Metro format. The term "drugstore" is very different from a UK style "chemist" with BWS and a bigger food offering.

Looking at a recent IGD store visit of a flagship Chicago store, you can see how Boots might want to bring some of the concepts into their UK estate. Boots have managed their stores very well over the last few years, bringing in on-trend concepts at the right time and, as their recent decision to scale back on in-store photo labs showed, knowing the right time to exit.

But to get continued growth, they will need a new stream of ideas. "3 for 2s" on health and beauty have been copied by the grocers successfully while their famous Meal Deals have become an industry standard. They have plenty of space to play with and generally have great locations for their larger stores (the single most important factor for a successful High Street store!), so why not use new experience in the group to take the fight back to the grocers? Although Tesco appear to be regarding Metro as a focus again, only Iceland, Waitrose and Co-op are serious players in High Street locations and finding a point of difference against them shouldnt prove too difficult.

I should point out at this point, that I can't see any of this happening until much further down the line. There's so much in terms of product and supply chain to get through first and I would expect to see some similar to Asda's Global Buying Initiative to be replicated with multi-national brands. However, there's a lot of potential in this move and I get the feeling we're not going to get bored of talking about it for some time.