WHSmith pilots digital headphone store as it eyes 'new opportunities' for growth

The retailer is seeking to capitalise on the booming headphone market and has also opened a “store implant” within its London Victoria shop dedicated to a smaller number of lines.

Boss Stephen Clarke revealed the trial after WHSmith unveiled a 2% increase in like-for-like sales within its high street stores in the five weeks to January 2. Over the wider 20 weeks to January 16, high street sales remained flat, but like-for-likes jumped 5% within its travel arm.

Driving sales

Total sales grew 4% over the 20 weeks, with travel sales surging 12%, but Clarke is eyeing new ways to further increase revenues in 2016.

“If you go into Victoria station, we’ve opened a new store implant selling quite expensive headphones. That’s a trial for us and we’ve since opened a standalone digital headphone shop in Liverpool airport as well,” Clarke told Retail Week.

“We’ll be looking at more of that sort of stuff – investing in our stores, our formats and new space to drive sales forward.”

The retailer has also opened a number of stores at Sydney International Airport and continues to test around 30 dual-branded WHSmith and Cardmarket stores, the first of which opened a year ago.

Clarke said those stores had “a really good Christmas”, but will let the shops trade through the remaining two “big peaks” of Valentine’s Day and Mother’s Day before making a decision on a potential wider roll-out in April.

Books rebound

“There’s been a shift in the market – sales of e-readers have really fallen away and the growth in sales of e-books has come to a halt or even gone into reverse”

Stephen Clarke, WHSmith

He added that the physical book market had rebounded this year, which helped drive sales over Christmas.

Clarke said the festive period in that sector was “a lot less challenging this Christmas than in previous years” and added: “For the calendar year of 2015, it was the first year since 2007, I think, that the physical books market actually grew year on year.

“There’s been a shift in the market – sales of e-readers have really fallen away and the growth in sales of e-books has come to a halt or even gone into reverse. That’s been helpful to the physical books market and is certainly not what people were predicting a couple of years ago.”

Headwinds

Despite the sales upturn, Clarke admitted WHSmith would face headwinds this year in the form of the national living wage, the apprenticeship levy, business rates and the sugar tax.

He said the retailer was already “re-organising our ranges to make them more healthy-eating focused” to combat the latter charge, but added: “Each of these things in isolation is not necessarily hugely onerous. When you take them all together, it does put a disproportionate burden on retailers.

“By far the most challenging of all of those is business rates, which still bobbles along without a solution.

“The BRC, in particular, is very engaged with the Government, but I think they need to listen to how all of these things are impacting us and really think through what it could mean for the high street.

“It does put a huge amount of pressure on the high street and we know that healthy high streets are key to a successful economy.”