As far as dominance of the over-the-counter pharmaceutical market
goes, the boot is switching to the other foot.
That was the unhappy message for Boots in last Sunday's Observer. The
paper warned that soon-to-be-released figures would show Tesco already
kicking the long-term leader off the top-spot in the wake of the
scrapping of the Retail Price Maintenance (RPM) agreement, which fixed
prices for many non-prescription drugs.
'If I were Boots, I'd be very afraid,' one analyst was quoted as
The claims spoiled what had been a good week for Boots in PR terms. When
below expectations annual results were announced the previous Thursday,
CEO Steve Russell had managed to boost the share price with an 'upbeat
message on strategy,' according to Reuters.
Boots announced plans for an upmarket 'Pure Beauty' concept store to
complement its 'wellbeing' services such as nail bars, reflexology
centres and the TV channel formed with Granada.
But as The Observer rolled off the presses, Russell was still spreading
the positive message in The Sunday Telegraph. And if the Observer
criticism meted out spread fear among the Boots PR team, they hid it
Francis Thomas, Boots head of financial media relations, said: 'We
haven't seen the research that the Observer story was based on - and the
figures only refer to one particular month.
'But because of the abolition of the RPM, we're into a new ball game as
far as the marketing of medicines is concerned. Early indications are
we're doing well by being able to promote on price and being able to use
three for two deals with medicines that were previously barred from
using such mechanisms,' he added.
Tesco was bullish about the possibilities offered by the scrapping of
the RPM. UK head of media relations David Sawday said: 'It's a great
story. As responsible pharmacists, we didn't feel it would be
appropriate to lobby for the abolition of the RPM. Now it's happened it
has allowed us to speak about our prices loudly.'
Former Boots communications director Ian Wright said it would be
premature to write his ex-employers off just yet. 'They've had nearly
six years to prepare for this day and they're bound to be ready. Boots
still has huge reserves of trust among customers and patients.'