WH Smith sales suffer in heat
UK like-for-likes flat in second half
August 28 2003
WH Smith has confirmed that it has seen sales hit by the heatwave which has kept customers away from UK high streets.
The book, news and entertainment retailer is also facing increased competition, with margins on entertainment products down. The market for CDs and DVDs has been aggressively targeted by supermarket operator such as Tesco and Asda.
With the retailer also seeing a downturn in its UK travel retail division, WH Smih said its UK retail business will deliver results below market expectations.
WH Smith said its UK high street like-for-like sales in the six month to the end of August will be flat. “due to a highly competitive sales environment and the recent hot weather, which has reduced footfall.” Gross margin for the second half will fall by around 60 points, due to the entertainment margin decline.
The retailer added that contribution from books, stationery and news will be satisfactory, and said it is tightly controlling overheads.
The UK travel retail business has been hit by the reduction in passenger numbers due to the Iraq war and the SARS outbreak.
WH Smith also hinted that it may be close a disposal of its US travel retail business, which has been underperforming for some time. The company said it “is continuing to review all its options” and anticipates “being in a position to update the market in the near future.”
