Storm clouds are gathering over Britain's economy, with waning consumer confidence and political uncertainty suggesting it could be heading for a recession, the boss of the country's biggest health and beauty chain said on Wednesday.
New Format Store
Seb James said Boots, one of the best-known names on Britain's shopping streets, was well placed to cope, as he opened a new format store featuring the company's biggest ever wellness range and express pick-up lanes for its pharmacy that he hopes will help it to build on recent market share gains.
But his gloomy forecast is likely to send a chill through a retail industry which has already seen hundreds of stores close and jobs lost this year.
James said Boots itself, which currently trades from about 2,500 UK sites comprising around 500 large retail stores and the rest community pharmacies, planned to close stores where it has several sites on the same shopping street - although he added that accounted for just 1% of its overall retail selling space.
Official data last week showed cold weather in May prompted the biggest drop in British retail sales this year, while an industry survey on Tuesday showed retail sales plunged this month at the fastest annual pace in 10 years. That added to signs the UK economy, struggling for momentum ahead of Brexit, is set for a weak second quarter.
Britain had been due to leave the European Union on 29 March, but Prime Minister Theresa May was unable to get her divorce deal ratified by parliament, and the date is now set for 31 October. A contest to replace May as prime minister is underway.
"The storm clouds are gathering ... We need to be ready," said James, managing director of the 170-year old Boots UK business.
"We currently have a fairly unusual political situation. I think we're due a cyclical recession and I think we are definitely seeing in the GFK consumer (confidence) numbers some weakness," he said at the new store at Covent Garden, London.
Despite the tough conditions, James said Boots, which is part of US listed Walgreen Boots Alliance, had taken market share in all of the big categories it operates in, including pharmacy, in the last six months. Walgreen Boots Alliance is due to publish third quarter earnings on Thursday.
"Most of my competition have had three or four years where they've opened new stores and revamped their stores and now it's our go, it's our move and if we play it well we should be able to take quite material share," he said.
James' plan is to learn from the new 28,524 square foot Covent Garden store and take its most successful elements to the rest of Boots' store estate.
The store also features a new concept beauty hall with over 300 brands, automated lockers for repeat prescription collection and a revamped opticians.
And James is confident Boots' parent will pay for the investment. "He's never said no to me yet," James said, referring to Walgreens CEO Stefano Pessina.
James, the former boss of electricals and mobile phones retailer Dixons Carphone, is an Eton and Oxford University contemporary of Boris Johnson, the leading candidate to be Britain's next prime minister.
Asked about Britain's turbulent politics, James said: "We will operate in whatever environment we find ourselves in. That's true whether Boris Johnson's prime minister, (Labour's) Jeremy Corbyn's prime minister or anyone else.