WH Smith is making a major change to shelf labels in UK stores, introducing electronic shelf labels (ESL) to its new flagship stores in Heathrow Terminals 3, 4 and 5. The labels, provided by Solum, receive price changes, information updates, and promotions from the company's central office instantaneously.
Trail in Heathrow Before Wider Rollout
WH Smith, which has branches in Birmingham, will trial the new technology first in Heathrow before introducing it to further stores. Heidi Reynolds, the retail director for the firm, said: 'At WH Smith, our focus is on making every journey better by bringing together all the essentials travellers need in one place. As we continue to evolve our offer, the ESL solutions help us support a cleaner and more intuitive customer experience while enabling colleagues to operate more efficiently in busy travel environments.'
Profit Outlook Cut Amid Middle East Conflict
The announcement comes as WH Smith has cut its annual profit outlook again and unveiled plans to raise equity, citing fewer passengers going through its travel hubs due to the Middle East conflict. The retailer hopes to raise around £100 million from investors through issuing new shares. The chain, which includes shops in airports and train stations, said consumers had been tightening their budgets.
WH Smith now expects to report a pre-tax profit of between £75 million and £90 million for the full year, down from a previously guided range of £90 million to £105 million. The changed outlook reflects 'the observed and anticipated decline in passenger numbers and weakening consumer demand across all divisions.' Revenues from its UK airport shops dipped by 1% in the 14 weeks to June 6, compared like-for-like with the same period a year ago.
Investor Concerns
Richard Hunter, head of markets at Interactive Investor, said WH Smith's capital raise 'could prove to be the last roll of the dice for the company.' He added: 'The capital raise comes at a time which will severely test investors' patience and loyalty to the cause. Indeed, further investment into WH Smith will require something of a leap of faith as weaker consumer confidence has affected spend per passenger, a reduction in flights in the US has impacted airline capacity, while the Middle Eastern conflict has generally disrupted any progress which the group had been making.'
