The narrative around venerable UK retail stalwart WHSmith is a mixed affair. Its high street business attracts varied commentary to say the least and its performance has been typified by declining like-for-like sales and profits largely propped up by careful space and category management and a strict eye on costs.
The travel division of the business, meanwhile, continues to thrive, its network of stores in stations, airports, motorway service areas and hospitals seeing full year LFL sales growth of 3% and an increase in profits of 7%. Indeed, travel now accounts for the bulk of both revenue and earnings for the broader group. This part of the business is an increasingly global affair too. The WHS airport business now extends into Latin America, Australia, Europe and the Far East and, with the recent acquisition of InMotion, it now has a presence in the USA.
The traditional WHS concept accounts for most of the travel division’s activities, although the portfolio is becoming more diverse. The group also operates M&S Simply Food outlets in hospitals and has a small but growing number of standalone Tech Express stores and specialist bookstore outlets too.
In the UK, WHS is present in virtually all airports and its operations in the country’s two main hubs – Heathrow and Gatwick – are surprisingly extensive, with 26 and 18 outlets respectively. I recently visited one of the airside stores in Gatwick, a ‘store of the future’ concept that will provide a blueprint for all larger airport stores as and when they are refurbished.
I must admit that I had not fully recognised the complexities of running an airport store: issues such as staff registration for security clearance; the absence of backrooms (it takes up to 45 minutes to retrieve stock for some outlets, and only outside of the hours of 08.00 – 16.00); and the fact that all stock has to be security checked means that running airside stores can be an operational and logistical nightmare.
This 4,800 sq. ft. store has adopted a new race track template that has been designed to circulate shoppers clockwise around the store, a contrast to previous concepts where the checkouts were in the back corner, meaning that shoppers on their way into the store were often having to navigate their way past punters exiting the unit.
Bearing in mind that some of these large stores can be ringing up to 100,000 transactions per week, the fact that the new concept avoids this logjam is a very welcome development indeed. The new design also feels a lot lighter and more spacious, despite doing very brisk business indeed (it was half term when I visited, and Gatwick was mobbed).
The store benefits from plenty of digital signage which not only informs shoppers about special offers but also creates a sense of dynamism. There is also more space devoted to branded displays, with M&M’s and other confectionery brands standing out strongly, and the whole store is divided into well-defined ‘worlds’ that helps navigation.
Traditional WHS categories like news, magazines, books and stationery are all executed strongly, while the food-to-go proposition has a breadth of range that lends it credibility. There is a fair bit of space allocated to technology and other categories like postcards and souvenirs enjoy some playful merchandising, displayed on a pillar box and red London bus respectively.
The store has both manned checkouts and a decent number of sleek new and improved self-checkouts, meaning that purchases were being expedited smoothly and the flow of customers through the store was maintained.
This concept represents a real step up for the WHS airport proposition, an improvement that is clearly important as transport locations become ever more important for the retailer. The environment has been massively enhanced and the shopper journey is a lot more enjoyable. Good work.
Bryan Roberts, Global Insights Director