High street stalwarts, including Boots, M&Co, New Look and even frozen food grocer Iceland, have all decided to close some of their stores this year, as it seems a different retailer joins the ranks of those reporting declining sales figures.
The rise in online shopping has hindered the growth of traditional retailers and slowed consumer confidence as a result of the Covid-19 pandemic and since then the ongoing cost-of-living crisis and rising inflation has led to the lowest rate of store openings in seven years.
The future of retail being less bricks and mortar and more digital seems to ring true, but maybe not when it comes to airport retail.
Take WHSmith for example, the stationary retailer recently ruled out plans for any more high street stores.
According to CEO Carl Cowling, opening more stores “would just be a duplication” of its 550 high-street stores in the UK.
However, the company revealed it will now focus on its airport and train station growth, following a rise in revenues in its travel arm.
“We’ve got a very healthy high street business in the UK. But we’ve got no ambitions to grow that,” he said.
In the 13 weeks that ended 27 May 2023, revenues increased 24% on last year, as air sales were up 26%, 33% in hospitals and rail 10% despite the ongoing impact of industrial action, respectively.
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Just today, the Top350 retailer, announced its new “strategic partnership” with Virgin Wines to focus on commercial partnerships. As a result, a selection of Virgin Wines products is now being stocked across 39 stores within airports and train stations nationwide.
“We are delighted to have partnered with WHSmith Travel to provide our exclusive, quality wines to their customers within travel hubs across the UK,” Virgin Wines CEO Jay Wright said.
“This is a great opportunity for thousands of WHSmith customers to sample the outstanding wines that Virgin Wines sources from across the world and we hope that it will entice them to try more wines in the future as well as enjoy a glass or two while on their travels.”
Wright added: “Strategic partnerships such as this remain fundamental to our growth strategy, and we look forward to updating further on our progress in this area over the coming months.”
A brief timeline
In 2019, the high street retailer acquired Marshall Retail Group, a travel retailer which specialises in opening specific stores in airports, in a deal worth £314.66 million ($400 million).
Marshall Retail Group currently operates more than 170 locations across the USA, with 70 at airports. At the time, Cowling said the acquisition “will accelerate the growth of our international travel business”.
However, a year prior, the company also acquired InMotion, a travel retailer which sells tech products, in a deal worth £155 million. Established in 1998, InMotion operates in 114 stores across 43 airports in the USA, which is also a market Cowling wants to expand in.
As a result, he unveiled plans worth £120 million, to open shops in the US and across Europe over the next year. “We’ve got a pipeline of 60 stores to open and we’re constantly winning tenders in airports,” he continued.
It has also recently invested in the opening of new stores across Europe, following the launch of five new stores in airports in Brussels and Oslo, where it expanded into selling hot food.
The future of airport retail
According to the Department for Transport, air travel is on the rise, with the firm predicting passenger demand will increase by more than double to 445 million flyers per year by 2050.
However, when it comes to WHSmith, the company believes its international travel retail arm is a “robust retail channel that continues to expand.”
The company runs standalone coffee and convenience-hybrid formats, specialist book store formats (The Bookshop by WHSmith), souvenir stores, Kids toys and books shops (Zoodle), and stationery and gifts stores across its travel arm.
“When entering new countries or growing in our existing territories, our principle is to “think global, act local,” WHSmith said in a statement.
“Air travel is becoming increasingly accessible to more and more people across the world and airlines and airports operators continue to invest in infrastructure to grow capacity and to develop better retail and leisure facilities in airport terminals.
It concluded: “We know that, while it’s the destination that matters to our customers, it’s the journey that matters to us.”
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WHSmith is ranked as a Top350 retailer in RXUK’s Top500 report, which highlights how the leaders in this market are proving flexible and adaptable in response to the ongoing Covid-19 pandemic, cost-of-living crisis and rising energy costs.