WH Smith’s share of the stationery market is set to decline by 1.8 percentage points (ppts) to 10.5% in 2018, as discounters and premium players attack its mid-market proposition, according to GlobalData.
Discounters like B&M, Home Bargains, The Works and Poundland are forecast to hold around an 11% combined share of the UK stationery market in 2018, up 2.4ppts from 2013. WH Smith, compared particularly to B&M and Home Bargains, offers much less value for money – for example, (at time of writing) a 10pk of Bic black ballpoint pens were available for £4.99 at WH Smith compared to £1.49 at B&M.
Zoe Mills, retail analyst at GlobalData, said:
“With 88.7% of stationery shoppers surveyed by GlobalData in 2018 stating that good value for money was an important driver when choosing which retailer to shop at, WH Smith must review its pricing strategy. Branded products, which are widely available and easily comparable, must be priced competitively and own brand items should be priced strategically to drive higher margins.”
WH Smith has also been impacted by the rise in stylish stationery retailers. Smiggle’s entrance into the UK stationery market has had a significant impact on WH Smith and alongside trend-led retailer, Paperchase, these two retailers now account for around 9% of the UK stationery market – up 4.7ppts on 2013.
Mills continued: “Both retailers have captured the imagination of their target audience, warranting higher price points with fashionable and innovative products. WH Smith, in comparison, has failed to justify its price points, resulting in many of its customers now unwilling to spend with the retailer.
“Furthermore, 88.1% of female shoppers surveyed by GlobalData stated that trendiness is important when choosing which stationery items to purchase. This factor rated ahead of price and quality, and highlights that consumers are willing to spend on stationery when the product is individual and fashionable.
“In the past, WH Smith has produced on-trend ranges that have encouraged footfall to store. As a stockist of a Zoella-branded stationery range, it will encourage younger shoppers to its stores. However, it must look to expand upon this in 2018 to garner greater loyalty among these young consumers or risk shoppers losing interest.”