Swindon-based retail giant WH Smith has achieved its first sales increase since 2009 as its outlets in airports and railway stations continue to grow.
Total group sales – which include its high street stores – inched ahead by 1% in the 13 weeks to May 30, WH Smith said in a trading update to the London Stock Exchange. That compared to flat sales in the same period last year. 
Underperforming stores among the 604 it owns in UK high streets have held back sales growth across the entire group for six years – although WH Smith has concentrated on increasing margins and profitability in these outlets.
Gross margin continued to improve in the high street stores while cost savings were in line with its plans, said WH Smith, despite total sales falling by 4%.
In contrast, sales in its travel business – which includes its 725 shops in airports and railway stations – rose by 8% with like-for-like sales, which strip out new store openings, up 4%.
The group, which employs 14,000 staff and has its headquarters and distribution base at Greenbridge, said its ‘Food to Go’ range, which since last summer has operated across all its outlets, continued to be well received by customers.
“We will continue to focus on profitable growth and cash generation while investing in new opportunities in both travel and high street that position us well for the future,” said WH Smith in its statement.
David Jeary, an analyst at Canaccord Genuity, told the Financial Times that the sales performance showed WH Smith was “crossing a threshold” after years of flat or declining group sales.
But Paul Thomas of the retail consultancy Retail Remedy said the gap between WH Smith’s travel and high street stores had become a “gulf”, with the latter now “unappealing backwaters”.
He said: “Just as WH Smith’s travel stores steam ahead, its high street branches are in full reverse.
“In a rail station or airport, the WH Smith proposition makes perfect sense. Lean, convenient and with the snacks and mags that will appeal to a time-pressed traveller, it’s a winning formula despite its sometimes jaw-dropping prices.
“For many rail passengers, the brand’s travel stores are an essential stop-off between ticket office and train. By contrast WH Smith’s high street branches are unappealing backwaters.
“They’ve long since stopped being ‘destination’ shops. From stationery to books or meal deals, most of what they sell can be found cheaper elsewhere.
“With limited kerb appeal, their ability to grab passing trade is steadily waning. Many stores feel too big – a legacy of better times – meaning most sales come from an inefficiently small proportion of the floor space.”
He said the rise of the pound shops and the imminent launch of Mike Ashley’s Mega Value chain would erode their position even further.
“Without a complete rethink of their failing strategy, they risk becoming the next Woolworths,” he said.
