WH Smith's 'plain vanilla' resistance to recession

WH Smith chief executive Kate Swann was cautiously upbeat today, unveiling what she called a "completely plain vanilla" Christmas trading update.

She said sales were "exactly in line with plans" despite the snowy weather, disruption at airports and "the biggest recession in 30 years".

Total group sales at the high street and airports retailer slipped two per cent in the 21 weeks to 23 January, with like-for-like sales down four per cent.

But it pointed out "gross margins increased and costs were tightly controlled" as it continued its long-term shift away from entertainment products to focus on more profitable areas.

Ms Swann said: "Stationery continued to be good and I expect it to be up [at the half-year results in April]. The books market is quite soft but we grew our share."

The WH Smith chief has long argued that the retailer is well placed in the recession because it sells "low-ticket" items and is less dependent on discretionary spending. But she warned: "Clearly there are going to be a lot of tax rises after the election and we just don't know how it will play with the consumer. We are planning for it to be tough."

The shares, ahead 40% in the past year, nudged up 0.7p to 490.7p.