Guest slot from Ajaz Ahmed – major challenges ahead for WH Smith

Ajaz Ahmed founded the industry-changing Freeserve and is currently running Legal365. He also likes to tell it like it is as you will see over a short series of columns:  

The City reaction to the announcement that the CEO of WH Smith, Kate Swann, decided to step down was negative. The share price went down and the comments in the press were all about the good job she has done and whether her replacement can carry on that good work.

She inherited a mess and through restructuring, selling off divisions and opening more stores in travel locations, WH Smith is now profitable with a healthy share price. The two words that were mentioned a lot in the press were “cost cutting”, the words that were never mentioned were “what a great retailer”.

As a customer and a retailer I’ve got to say that WH Smith is just awful. Compared to some of our other great British retailers, they are not in the same league. The quality and design of their stores, their merchandising, shop fittings and Point of Sale is just plain boring and a mess.

The other day, I walked around the store in Leeds City train station. I then walked around the M&S a few doors away, and what a huge difference. I did the same thing in one of their newer stores at King’s Cross Station, I found the same confusing mess plus the tills are in the wrong place, they are in the far right hand corner, have they never wondered why busy supermarkets have tills near the door?

I looked at the prices of the drinks and confectionery, and they are charging service station prices while other retailers in the train station are charging the same price as the do in their high street stores. Why don’t they?

As I was writing this article my daughter told me she went to WH Smith in Manchester Arndale centre and a packet of Walkers crisps were priced at 80p (99p at the station), she ended buying two packets for 80p from Wilkinson’s a few doors away.

So what is Smith’s long-term problem? It is that everything they sell is available cheaper elsewhere within walking distance and their customers know it. Books, stationery, greetings cards and confectionery, none of it is particularly good value for money. If you studied some time-lapse film of a WH Smith store you would probably find that the majority of customers never venture beyond the newspaper and magazine sections.

The two categories, Newspapers and Magazines where prices are fixed, are very quickly going electronic. Just stand in a train in the morning and you will see how people are glued to their smartphones and tablet devices.

For example, Newsweek announced that it is to close its print edition and become an internet-only business. This trend will only increase as more and more people get their news and content from electronic sources.

They must know this? They must have employed some clever people and have a plan, right? I visited the WH Smith website for the first time in my life and my first impression was that it looked very dated, about 10 years out of date. 

The first department I clicked on was e-books. It proudly claims to have access to 2.2 million books but most of the books on the page were out of stock, then I clicked on the business & finance department and the same story, most of the books were out of stock. How can you be out out of stock of an electronic item? It’s impossible.    

So not only are their stores dated but their website is the same. I’m reminded of that TV programme “Changing Rooms” where they transform a house. What would happen if Tesco, Sainsbury’s or M&S did a Changing Rooms on a WH Smith store? 

Now that is something for Kate Swann’s replacement to think about.