For those who may not be familiar with the UK's WH Smith, the chain stocks a combination of newspapers, magazines, books, cards and stationery - plus some confectionery and a few toys. Stores have traditionally been located in town centers but, more recently, branches have opened in airports, train stations and hospitals. Latest plans, just announced, are for stores in office blocks.
The Guardian reported chief executive Kate Swann's conviction that there is potential for 80 such stores, each of approximately 1,000 square feet, carrying some 2,500 lines. These will mostly be confectionery, stationery and magazines. Plans are based on similar success in 80 hospital locations. The first office block store has opened in a building in Liverpool where 2,500 people work.
Intriguingly, Smith's "annual profits, for the year to the end of August, were up eight percent despite lower sales…with outlets at airports and rail stations on the brink of making greater profits than the main high street chain, even though they have just half the turnover and less than 15 percent of the shop floor space." In fact, operating profits at the travel division have reportedly increased by 17 percent despite fewer air passengers.
Meanwhile, perhaps because so many other types of off- and online retailer are providing serious competition, "like-for-like book sales were down four percent" in spite of increased margins. And fewer computer games and DVDs were sold, partly because its distributor folded but also because Ms. Swann scaled down emphasis on what was described as a "highly-competitive, ultra low margin sector."
High street stores sell a wide range of newspapers, magazines, stationery, books and entertainment products. Travel stores focus on a tailored range of newspapers, magazines, books and confectionery more appropriate to customers on the move.
For a company that was created in the early nineteenth century, the early twenty-first century focus seems to be more on taking appropriate product to customers where they are likely to be rather than filling shelves and hoping that they will come.
Discussion Questions: Will taking stores to places where customers work make them more attractive, popular and/or profitable? What do you think about WH Smith's airport and railroad stores being more profitable than traditional locations and styles?