Following today’s release of WH Smith figures for the 20 weeks ending 16 January 2021; Mahya Agorlou, associate retail analyst at GlobalData, a leading data and analytics company, comments: “WH Smith continues to suffer at the hands of COVID-19, with travel revenue down to 37% of 2019 revenue alongside a decline of high street revenue to 87% of 2019 revenue. Despite its previous ability to yield strong sales from both its travel and high street locations, the results show the retailer’s vulnerability in its reliance on such channels, particularly its reliance on its travel business.
“The retailer continues to be severely impacted by the travel restrictions imposed both locally and globally, diminishing footfall in its travel and high street hubs. In spite of a majority of its high street stores remaining open due post office concessions and the continued sale of food, drinks and grocery products, high street stores continue to experience sales decline as a result of restrictions and government guidance to stay home. The decision to temporarily suspend its click & collect services will hinder footfall further.
“North America is experiencing a faster recovery rate due to a higher proportion of domestic travellers versus the rest of the world; hence overall revenue reflects stronger internationally at 43% of 2019 levels. Despite the challenging environment, WH Smith has continued to gain business in travel locations and has won a further 4 stores in major US airports, opened 3 stores in the UK and a new unit in Perth; an initiative that will act favourably for WH Smith in the long term when the effects of the pandemic subside and life returns to normal. The focus on renegotiating rents, increasing conversion rates and driving category development will also greatly benefit the retailer in the long run by placing it on stronger financial footing and appealing to consumers appetite further.
“The retailer reported record performances of its online business. However, despite such performance the retailer lacks online destination appeal on its own website whsmith.com. In order for WH Smith to keep up with rivals, Waterstones and Amazon, and remain relevant, WH Smith desperately needs to invest further in its e-commerce business to strengthen its omnichannel presence in an increasingly digital world; an action that would have buffered sales further had it been done sooner.
“When comparing to rivals such as Waterstones, WH Smith also lacks reward and loyalty initiatives. Waterstones loyalty programmes entice consumers by rewarding them for reading and going green, appealing to both the book lovers and environmentally conscious consumers. To keep pace with competitors, WH Smith needs to expand their reward programme to attract shoppers and cultivate retailer loyalty in such a difficult and competitive trading environment.”