WHSmith exploits regular travellers

I was glancing through a few year end results and spotted WH Smith, a retailer I have a grudge with. The bottom line is sales down, margins up. Sounds like a miracle in retail at the moment. So how do they manage to pull off this elusive trick? I avoid having a rant as it can come across as sour grapes but I decided to make an exception with them!

How many readers are regular travellers and wander in to a WH Smith? About 50% of the retailers outlets are in airports/train stations/service stations; i.e. places where they have an monopolistic position.

They charge a premium of 25% for example on tobacco in these outlets. It is a scandal and they seem to get away with it. I’ve challenged staff several times but they just look blank. Also in many places they only sell 10′s of gaspers at a hugely inflated price. Again no response from the staff.

So my guess is the margin rise is a result of taking advantage of their customers in places where there isn’t any choice. This doesn’t seem that smart to me because as a sample of one I will not cross the threshold of WH Smith anywhere as a result of these regular experiences.

To add insult to injury how many happy readers have queued up in a WHS at an airport? It is a trial of patience and subdued anger as the long line slowly curls around the crap service level – i.e. not appropriate for the demand. It is a classic example of any business with a monopoly – the absence of competition leads to high prices and rubbish service. I don’t blame the staff, they can’t change anything, but they seem to be brainwashed incapable of having any kind of conversation, in particular why their prices for cigarettes are being sold at a premium of £2 a pack.

The outgoing Kate Swann is credited with doing a good job with this dubious retailer but my question is would the brand survive if it relied only on high street presence? My guess is not given half of the outlets are in a ring fenced location. Clearly in locations such as airports the usual pressures of competition don’t apply hence the performance of any retail outlet isn’t a reflection of what happens in the real world.

I wonder if the WHS management got the idea from ”I saw you coming”, a very funny Harry Enfield sketch about a shop in Notting Hill selling tat for hugely inflated prices. Sadly it seems to work.

 

 


6 Responses to WHSmith exploits regular travellers

  1. Andrea says:

    I can’t remember a time when I’ve not had to queue for something in WHSmith – which ends up in just abandoning the purchase given how long it takes.

    It’s a shame it’s in such a weird position given they’ve split the business in three and it’s starting to look good in the books, finally.

    There’s been a boom in niche print but none of it is with WH Smith. Can think of lots of magazines that just get lost in a sea of offerings inside their Travel stores. Step outside in any Relay store and it feels like a bit more of a pleasure to buy, even if they’re not perfect either. It just feels like magazines, news and some refreshments are all you need: not a Paperchase, novelty shop and children’s store mixed into one odd combination. Or at least if you’re going to offer them make them a bit nicer than they are now.

  2. will says:

    Couldn’t agree more. It takes an age to get served in their Richmond branch (on the high street rather than train station), is very over priced and they always seem to have an uncompetitive promotion on chocolate, which they encourage you to take up at the till. Very poor all round.

    • Paul Simons says:

      Seems to have touched a nerve! Several times I have asked the WHS staff at airports why they charge so much for cigarettes and I never get an answer.
      At a motorway service station recently I asked the same question and the chap serving just shrugged and said “You can’t get them elsewhere here”. At least he was being honest!

  3. While i understand the airpirt shops adding monies to the normal cost of tobacco.. I shop in the WHSmiths normal shop in Green park Reading. And ive just payed £8.0 for a pkr of cigarettes that normally cost me £6.20. !!!!! Nearly ALL of there merchandise is over priced and i dont understand why.. !! ??? Thankyou Ms Denise Fisher

  4. While i understand the airpirt shops adding monies to the normal cost of tobacco.. I shop in the WHSmiths normal shop in Green park Reading. And ive just payed £8.0 for a pkr of cigarettes that normally cost me £6.20. !!!!! Nearly ALL of there merchandise is over priced and i dont understand why.. !! ??? Thankyou Ms Denise Fisher

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