WH Smith was recently voted the UK’s worst High Street retailer by Which? readers but at least it is still in business.
In the survey carried out in January, Which? readers complained about the books and stationery retailer’s customer service and labelled it a “horrid shop”.
WH Smith’s on High Street Kensington in 1954. pic.twitter.com/OYpEIEcb3Q
— Rob Baker (@robnitm) May 29, 2018
For a long time now the strategy has been extracting as much profit from existing customers rather than chasing top-line growth and that strategy works better in the newsagent's shops that are based in travel hubs (e.g. mainline trains stations and airports), where, to a certain extent, customers have few alternative outlets to shop at if they do not like WH Smith's prices or allegedly tatty shops.
In its fiscal third quarter update, the travel business, which accounts for around 54% of the group's sales, is expected once again to do most of the heavy lifting in terms of performance.
Nicholas Hyett, an equity analyst at Hargreaves Lansdown, said: “The focus on high footfall transport hubs saw travel revenue rise 7% during the first half, and the company is aiming to win more retail space at airports and stations in the UK and abroad.”
Hyett added:” The entry into the US market, through a joint venture with Duty Free Americas, should provide long-term growth potential.”
As one of Europe’s largest manufacturers of plastic packaging, the crackdown on plastics in both the UK and Europe has weighed heavily on RPC Group PLC (LON:RPC), which reports full-year results on Wednesday.
The EU’s most recent proposals target single-use plastics, like cutlery and straws, and calls for all plastic bottles to be recycled by 2025.
Graham Spooner, an investment research analyst at The Share Centre, is expecting few surprises as the company reported in March it was on track to achieve growth in full-year sales and profits.
“RPC has returned to its strategy of buying companies so any comments on potential deals will be of interest, as will any update on how the integration of previous acquisitions in Europe is progressing,” Spooner said.
“With plastic waste very much a high profile subject at present, the market will also be interested in whether the company has held any discussions with the government on the proposed deposit-return scheme for single use glass and plastic bottles. With a long track record of dividend growth the market will also be focusing on what figure the company has settled on this time,” he added.
Significant announcements expected
Trading update: WH Smith Plc (Q3) (LON:SMWH)
Finals: RPC Group PLC (LON:RPC), Alpha Financial Markets Consulting PLC (LON:AFM), Findel PLC (LON:FDL), Tricorn Group PLC (LON:TCN) , Workspace Group plc (LON:WRK)
Economic data: Halifax UK house prices; US international trade; US productivity and costs
WH Smith has been voted the worst shop on the British high street. What’s so bad about it? Prof David Butterfield explains: https://t.co/YUUaC71KhC
— Fraser Nelson (@FraserNelson) May 28, 2018