WH Smith’s high street decline is offset by retailer’s travel growth

• WH Smith saw revenue across its travel arm rise by 9% in 13 weeks to 1 June 

WH Smith’s expansion into travel hubs across the country is more than offsetting a continued decline in its high street business. 

The retailer told investors on Wednesday that UK high street and online revenues fell by 4 per cent in the 13 weeks to 1 June, but like-for-like sales were flat.

Across the group’s travel arm, which has stores across transport hubs like railway stations and airports, revenue increased by 9 per cent over the same period.

Total revenue increased by 8 per cent in Air, 14 per cent in Hospitals and 8 per cent in Rail in the period, WH Smith said. 

‘It will be interesting to see if the business takes on a more decisive action on its high street business as the sector continues to struggle’, Russell Pointon, director of consumer at Edison Group, said on Wednesday. 

WH Smith shares were up 2.62 per cent or 30.00p to 1,173.00p on Wednesday, having fallen over 26 per cent in the last year. 

The group told shareholders it remained on track to hit full-year forecasts despite a slowdown in sales growth in third quarter, as strong growth in the travel division was tempered by falling sales on the high street.

Total group sales increased by 5 per cent by the end of the period, easing from 8 per cent.

Turnover in the travel division rose by 8 per cent, slowing from 13 per cent, as growth rates across Travel UK, North America and Rest of the World segments decelerated.

In the UK, WH Smith said growth had slowed ‘as we annualise the strong recovery in passenger numbers in 2023’.

The retailer added: ‘Looking ahead, the group is well positioned as we enter our peak summer trading period.

‘Good trading momentum continues across all three Travel divisions and we are in a strong position to capitalise on substantial growth opportunities across our markets.’

WH Smith has been bolstering its presence across transport hubs and hospitals, both of which have high footfall levels. 

It said the ongoing ‘transformation’ of the business into ‘a one-stop-shop for travel essentials’ is delivering ‘strong results, increasing average transaction values and returns’.

Russ Mould, investment director at AJ Bell, said: ‘WH Smith exploits a captive audience, namely people who want something but cannot shop around as there are either few alternatives or they don’t have time if they are about to catch a plane or train.’

Across some of its high-street stores, WH Smith has introduced Toys R Us concession sections. 

In May, WH Smith unveiled the first 17 locations for the next tranche of Toys R Us shops to launch within its stores over the summer as the revival of the children’s chain gathers pace.

The high street group, which has already opened nine Toys R Us shop-in-shops as part of its retail partnership with the brand, is to open another 30 of the concessions by the end of August.

Three of the concessions – in Hereford, Herefordshire, Leamington Spa in Warwickshire and Fosse Park in Leicester – opened on 25 May.

The retailer’s move to open the first concessions last year marked a return for the children’s chain following its collapse more than six years ago.

Victoria Scholar, head of investment at Interactive Investor, said: ‘Investors are enjoying a 3 per cent bounce in WH Smith’s shares today. 

‘However taking a step back, it continues to be a tough time for its investors with shares down year-to-date, underperforming the UK market. 

‘Longer-term, performance has been equally painful – WH Smith has struggled to appeal to investors with shares still languishing more than 50 per cent below their pre-pandemic highs.’