High street pressure weighs on WH Smith

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Fears of a tough Christmas for retailers were fuelled yesterday after WH Smith revealed fresh pressure on sales of its books, stationery and sweets.

The high street bellwether said sales on a like-for-like basis, which excludes changes in store space, were down 6 per cent on a year ago in the 10 weeks since September 1.

While the company remains on track for profits growth, shares fell as analysts worried about prospects ahead of the peak trading season.

WH Smith said total sales at its 561 stores at airports, motorway service areas and railway stations were flat on a year earlier but down 4 per cent when new space is stripped out. Total sales at the chain’s 612 high street stores were down 5 per cent and by 6 per cent at a like-for-like level.

David Jeary, a retail analyst at Investec Securities, made no change to his forecasts ahead of Christmas and said he retained a buy rating on the stock.

However, he added: “The figures may disappoint some and provide some fuel for any bears of the stock.”

Mr Jeary pointed out WH Smith faced tough comparisons with a year earlier, when the key drivers for sales were the launches of Tony Blair’s autobiography and Jamie Oliver’s 30 minute meals book.

WH Smith has focused on core areas such as books, news and impulse buys, rather than lower margin DVDs and CDs.

The strategy recently helped it announce a 4 per cent increase in profits to £93m for the year to August 31, despite like-for-like sales falling 5 per cent.