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The BBC's business report Rebecca Marston
"Both say there are no plans to merge"
 real 56k

Monday, 9 July, 2001, 06:56 GMT 07:56 UK
Boots joins forces with Sainsbury's
Boots on the high street
Boots is looking for new ways to boost its core business
The UK's leading health and beauty chain has confirmed that it is forging a joint venture with supermarket J Sainsbury.

The deal means that Boots could become a store within a store at the supermarket.

"The Boots Company and J Sainsbury have been discussing the opportunity for a limited amount of store-based trials and hope to be in a position to make an announcement shortly," said the chemist in a statement.

But the statement also added that a merger had not been part of the discussions, hoping to squash rumours that a take-over was in the pipeline.

Hard times

Boots has been suffering from cheaper selling prices for drugs and strong competition from supermarkets for cosmetics.

With the end of Resale Price Maintenance (RPM) on over-the-counter medicines, the supermarkets have launched a price-war on drugs.

Boots has already admitted that the price ruling will knock about 15m off its profits in the next two years.

J Sainsbury has also suffered from intense competition from rival Tesco which knocked it off its top spot as the UK's favourite supermarket.

Supermarkets have been pushing sales of non-food goods to create the "one-stop-shop" and attract more customers.

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See also:

16 May 01 | Business
Supermarkets slash medicine prices
08 Oct 00 | Business
Boots moves out-of-town
31 May 01 | Business
Boots' profits stall
12 Jan 01 | Business
Sainsbury's: 'Recovery on track'
30 May 01 | Business
Profits down at Sainsbury's
04 Jul 01 | Business
Supermarkets raise clothes stakes
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