WH Smith to take on more Post Office branches

WH Smith is doubling down on a successful strategy of taking on Post Office branches within its stores, as it continues to turnaround its fortunes after years of decline.

Announcing positive half-year results for the first time in 14 years, the company confirmed a new deal to take on 61 branches.

The BBC reports that around half of these will be run as concessions and remain owned by Post Office Ltd, a subsidiary of Royal Mail. The remainder will be owned and run on a franchise basis by the company.

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WH Smith already runs 107 Post Office outlets in its stores, all of which are operated as franchises.

Unions have reacted angrily to the news, with the Communications Workers Union (CWU) deriding the partnership to The Guardian as a "blatant back-door privatisation".

It is particularly angry that some of the stores to be transferred are so-called Crown offices, which are directly owned by Post Office Ltd. Plans to move 39 of these into private hands were announced in January.

The vast majority of the 11,500 Post Offices are already run on a franchise or agency basis.

"It is completely incongruous that WH Smith can run a major Post Office better than the Post Office itself," said Andy Furey, the assistant secretary of the CWU. "Our members do not wish to work for WH Smith, which has a track record of zero-hours contracts and a minimum wage approach to resourcing."

But Steve Clarke, the chief executive of WH Smith, said the changes did not mean job losses as the "service levels in our post offices are as good as you find elsewhere". He also refuted contract claims, saying that only 17 student part-timers across the entire business were on zero-hour contracts.

Roger Gale, the general manager of the Post Office's Crown branch network, told the BBC that WH Smith franchises had "improved customer service and brought benefits, with most open Saturday afternoons and Sundays".

WH Smith reported an increase of two per cent at stores open more than one year, the first such rise since 2002 and driven by the likes of adult colouring books. Pre-tax profit rose 11 per cent to £80m.

How WH Smith ended its 13-year sales slide

20 January 2015

WH Smith has become the latest retailer to report positive results for the Christmas period, as it continues to turn around its fortunes after 13 years of decline.

The book and stationery retailer expects to beat its full-year profit forecast, primarily because of a surprisingly resilient performance in its high street stores, according to the Financial Times. For the five weeks to 16 January, sales at established shops were up two per cent and were flat overall for the 20 week-period including Christmas covered by the trading update.

This contributed to a two per cent increase in sales for the company as a whole – reversing a two per cent fall for the same period last year – that also included a five per cent rise in outlets at airports, train stations and hospitals.

The strategy that WH Smith had been pursuing involves building profits at the high-footfall travel concessions to "manage declining footfall on the high street", the FT notes. But as the market for physical books has recovered - and amid a craze for adult colouring books - the high street arm is contributing positively again even despite the wider shift to online shopping.

Positive sales over the festive season capped off a strong year for the firm, which The Guardian says saw it in August post the best sales figures since 2002, since when it had fallen into what some analysts had assumed would be terminal decline.

Chief executive Stephen Clarke, who took over running the company in 2013, is credited with the turnaround and has been handsomely rewarded, with a 56 per cent pay rise to close to £4m.

Pirc, the corporate governance adviser, has said Clarke’s pay is "highly excessive" and recommended shareholders vote against the company's remuneration report at the annual meeting next week.

WH Smith shares surged 5.7 per cent today in the wake of the results despite a wider market plunge, to 1,677p.

WH Smith climbs down on 'hospital rip-off'

23 September

WH Smith has vowed to cut the cost of some goods in its hospital stores after it was accused of ripping off customers, reports The Times.

Last month, the high street retailer was accused of exploiting a desperate market of patients, relatives and staff in NHS hospitals by charging as much as 50% more for some products than in it does in its high-street outlets.

The BBC found several products were significantly more expensive at WH Smith shops in Pontefract and Wakefield hospitals than at the store's branch in the Trinity shopping centre in Leeds. The Times revealed that get-well-soon cards were sold at the retailer's branch at Bristol Royal Infirmary for nearly twice as much as they were at a high street outlet nearby.

The stationer has now signalled that prices will be checked to ensure that the difference between identical items in hospital and high street shops is no more than 1-2%.

However, Marks & Spencer – which was also caught up in the scandal with an outlet in Falkirk hospital charging £17 for a large bunch of flowers that costs £10 in the town – says it has no plans to alter its pricing.

A spokesman said: "Customers tell us they appreciate our stores in travel locations and hospitals and we work hard to keep prices competitive."

Paula Sheriff, the Labour MP who led the campaign, said that if M&S was not prepared to address the issue she would raise it in Parliament. "This issue is important for many people who are fed up with the culture of commercialisation within hospitals," she said.

Retail expert Clare Rayner told The Guardian: "What WH Smith has done really does set a precedent for the rest and if they're not seen to do the same thing then obviously the perception will be that they wish to exploit the captive audience."