Retailer WH Smith may raise prices to meet higher shipping costs

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(Reuters) – WH Smith may have to raise the prices of certain products this year after the British retailer flagged higher shipping costs from the Far East, inflationary pressures and potential impact from the Ukraine conflict.

Retailers across Britain have had to raise prices as they battle pandemic-led rises in freight costs, supply disruptions, and higher raw material costs, while the situation in Ukraine has exacerbated the problems.

“We might have to raise prices on certain product categories as we move forward in the year,” Chief Executive Carl Cowling said.

WH Smith said it anticipated that the Ukraine conflict might impact the group through increasing competition and costs of shipping goods internationally from the Far East and from increasing inflationary pressures on sourcing and supply chain.

But Cowling also said most of the retailer’s products such as magazines, books and pharmaceutical goods have fixed prices and are unlikely to fluctuate.

Shares in the two-century-old company reversed early gains to trade down 7% by 1016 GMT. 

WH Smith, which has stores in travel hubs and sells everything from books and sandwiches to Bluetooth headphones, said revenue from its travel business was at 114% of pre-pandemic levels in the eight weeks to April 23.

It returned to a headline pretax profit of 14 million pounds($17.61 million) for the six months to Feb. 28 from a loss of 19 million pounds a year ago, on the back of a recovery in travel as COVID curbs eased.

“We do not see a fall in footfalls especially in our rail and airport stores, as people are travelling more on the back of pent up demand after being at home due to the pandemic,” Cowling said.

Analysts at J.P. Morgan said WH Smith was well positioned to capitalise on the global recovery of travel markets, adding that the growth in WH Smith’s unit pipeline to more than 125 stores in travel was even more encouraging.

The company, which ships products from the Far East for its high-street stores, also said it has already received products from Asia well ahead of schedule to avoid “significant” headwinds from the rise of shipping costs.

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