How airports and captive audiences are driving a revenue spike at WH Smith
WH Smith continued to reap the benefits of resurgent post-pandemic travel demand, with the newsagent improving its expectations for the financial year in a trading update this morning, on the back of a 31 per cent year on year rise in revenues from its airport shops.
In the 13 weeks to May 27, the newsagent said it saw revenue in all its travel segments rise, with a particularly strong increase in its ‘Rest of the World’ division, of 79 per cent. North America was also up 26 per cent, with the UK at 24 per cent.
WH Smith said: “Looking ahead, the group is in a good position as we approach the peak summer trading period. Trading is strong across all three travel divisions, and we are very well positioned to capitalise on the substantial growth drivers across our markets.”
It comes a month after the popular newsagent more than doubled its pre-tax profits in its full year results, with the travel segment propping up its straggling high street arm following the return of global air travel post-pandemic. High street revenue was up 2 per cent in today’s announcement.
Chief executive Carl Cowling said of last month’s results, “I am increasingly excited by the opportunity in our Rest of the World division” as the firm outlined a new pipeline of stores and growth plans in a number of regions.
The newsagent said it anticipates further boosts ahead of the peak summer trading period, which is expected to see a surge in traffic at airports across the UK, with many airlines closing in on pre-pandemic profits.
It is also planning to open a number of new stores as part of its growth strategy, and said today that it has won over 70 shops in travel in the financial year so far. “Our pipeline of stores won and yet to open is over 130.”
Analysts at Barclays described today’s trading update as “upbeat,” with the potential for “further wins” from stores that have been won but not yet opened.
WH Smith has reinvented itself over the past two decades, building up an empire of shops in airports as it moves from the high street to the airport terminal.
Neil Shah, director of content and strategy at Edison Group, said: “WH Smith has released a positive trading update, revealing a significant boost in revenues from its airport shops as the newsagent capitalises on the resurgence in global air travel. With the peak summer trading period approaching, WH Smith is well-positioned to succeed across its markets.”
“WH Smith’s gradual transformation over the past two decades, transitioning from the high street to airport terminals, has played a crucial role in its resilience and expansion. The company’s emphasis on category expansion, average transaction value, and its travel essentials one-stop-shop format has been instrumental in driving growth, especially in its UK division.”