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High Street and Travel Point retailer WH Smith has announced annual profits of £104 million, but their alchemist in chief Kate Swann is to stand down as CEO next year. Following this news, and the announcement that Swann will be replaced by Stephen Clarke, MD of their High Street division, the retailer’s share price dropped. Will the transfer of power bring on the traumas like those seen at Tesco?
The points of interest from the company’s results presentation are about what they are planning for the future. I think that their strategy for the High Street stores is of particular interests as it is ‘not predicated on sales growth’. Their key points are:
Rebuild position as Britain’s most popular stationer, bookseller and newsagent
Retailing basics and cost control
Drive the gross margin by category mix management
Focus on core categories, rebuilding authority as a specialist
Reduced our reliance on entertainment
Use our space more effectively
Plan not predicated on sales growth in the short/medium term
For me the pointers from this list for independent retailers are to focus on:
So what can retailers learn from Smiths’ strategy?
Get the retail basics right, check the IAA categories for what you need to focus on.
Review your costs: stock, staff, power and other areas.
Look at the gross profit each of your categories are delivering and consider how you can drive more profit.
Use your space effectively, review each and every one of your shelves. Is your range the best you can offer to deliver you the best profit achievable?
Using the learnings of national companies is a useful way of keeping your business sharp and relevant to your customers. Checking what they say about how they see their future is a valuable investment of your time.
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