WH Smith has been accused of taking advantage of challenger brands with media plans in support of listings in its stores that don’t deliver.
The Grocer has spoken to a number of brands, who have described being asked to spend tens or even hundreds of thousands of pounds on media packages, only to find their products not appearing on shelf in the promised number of stores.
Others said that – even after committing significant sums on the packages – they struggled to get buyers to book in the in-store, OOH and digital activities for which they had paid.
Products were frequently listed at prohibitively high prices and against multiple competing brands, resulting in poor rates of sale, brands also complained.
‘Transactional’ relationship
Working with WH Smith was “very transactional” compared with other retailers, said one challenger brand founder.
“They say ‘this is the retail space available to you, and this this is how much it’s going to cost’,” they said. “Because their retail space is expensive and in high footfall areas, WH Smith [can] command high prices.
“They take your money and your product but they don’t give you any guarantees about rate of sale or volume purchasing and they can be really poor. They take advantage of the naivety of challenger brands, and that naivety comes from not having done it before.”
It was “very clear” WH Smith viewed the media packages as a prerequisite for being listed, another founder said.
“What they were saying to us was ‘unless you agree to buy this media space, there’s no deal’. They’re not interested in the product at all – the buyer even said to me they hadn’t tried ours – they’re interested in what they can extract from you.”
Rate card pledges
A rate card for WH Smith from 2024 seen by The Grocer details ‘media activation’ plans available to soft drinks and alcoholic drinks brands.
The plans start at £15k for spirits and go up to £500k for the most expensive, which promises listings in 300 high street and a minimum of 200 travel stores – as well as advertising across travel hubs, digital and in store.
Past campaigns including store wraps, digital screens, chiller screens, fascia and FSDUs had resulted in an average sales uplift of 28% for drinks brands, the deck stated.
All brands that took part in activations would receive a full analysis report detailing sales uplift, “measured on featured SKUs and brand items, alongside total category for full campaign evaluation”, it promised.
However, a third challenger brand said – after committing to spend £48k to support a listing with WH Smith – they struggled to get their buyer to engage in any marketing activity.
“It was very vague as to what we were paying for actually got us,” they said. “They almost wanted it as an upfront slush fund. They were incredibly unresponsive any time we tried to get stuff booked in, so we ended up doing very little marketing activity.
“Out of desperation we agreed to these digital billboards in Kings Cross and Euston and the cost was something ridiculous like £16k for a week. I went down there and we didn’t even have the billboard exclusively. It was cycling between about 15 different brands.”
The founder said WH Smith also demanded large chunks of the marketing spend was paid up front, affecting their company’s ability to pay other suppliers. When they tried to refuse, pointing out they hadn’t been able to book in any of the promotional activity that was promised, fulfilled orders were left unpaid, “which almost put us under”, they said.
“Instead of paying us they deducted the cost of the stock from the marketing fees they said we owed them,” they said. “Eventually I reasoned we could probably make enough in the next five months of the listing to break even. So we paid the balance and we didn’t receive another single purchase order from that point on; they were just rolling off stock.”
Compliance issues
A fourth challenger brand said they recently stepped away from working with WH Smith in the UK after five years in which “listing fees increased while implementation and compliance decreased”.
“We weren’t represented in the right number of stores, shelves were often left un-stocked (due to understaffing), promos were not being put through and we frequently had to chase overdue payments,” they said.
“After weeks of unsuccessfully trying to arrange a meeting with the buyer for the new trading year, we received an email informing us of a SKU reduction in our category. The required investment to remain listed was increased from £70k to over £400k, with less than a week to decide.
“We chose to step away and redirect our resources toward growing the brand with retailers and partners who are better aligned with our vision and value our collaboration.”
A new look and a new name for the WH Smith store in Fore Street.
— Around Wellington (@AroundWelly) August 29, 2025
It is among more than 400 stores which have been rebranded as TG Jones after being taken over by Modella Capital, owner of Hobbycraft. pic.twitter.com/1kzwM5QHjB
As WH Smith’s grocery turnover is less than £1bn annually, the retailer is not bound by the Groceries Supply Code of Practice (GSCOP).
The code bans outright listing fees as a condition of stocking “unless payment is made in relation to a promotion or ‘products which have not been stocked, displayed or listed by that retailer during the preceding 365 days in 25% or more of its stores’”.
Any brand that believed WH Smith had not fulfilled the terms set out in its media packages would “need to go down the legal route”, according to Ged Futter, director of The Retail Mind, a consultancy specialising in retail-supplier negotiations.
“Any retailer not bound by GSCOP can ask for whatever they want, and it’s up to the supplier to say no or to make sure that all money is clearly conditional,” he said. “If you’ve got a contract and someone isn’t fulfilling it then it’s a matter of contract law and that’s the route you’ll have to go down. But then obviously you’ve got the legal costs of doing that.”
WH Smith’s defence
A spokesman for WH Smith said: “We take pride in our strong, collaborative relationships with suppliers. Over the years, we’ve helped many suppliers launch and grow their brands, benefiting from our high-footfall, premium retail locations and our first-class media execution.
“While space is at a premium in the locations we operate, we work with suppliers to ensure we provide a range of assets available across our stores starting from £500, as well as the flexibility to support a successful launch.
“Clearly with challenger brands, some promotions will be more successful than others, but we find many suppliers have grown or repeated collaborations with us following successful executions.
“We always abide by the contractual terms we agree with brands and our buyers are proactive in ensuring that the performance of any new range or promotion exceeds expectations. We have clear processes in place if suppliers have any concerns.”
Profit warning
The complaints come after WH Smith reported it had exaggerated full-year profits by around £30m last month, citing “accelerated recognition of supplier income” in its North American division.
Analysts have said the overstatement could be down to the retailer booking back margin income from suppliers in the form of incentives and discounts as soon as they are booked, rather than when the target for sales has been achieved.
The profit warning should serve as a warning to “any retailer… reliant on this kind of income” for its profits, Futter said.
“This is something that Tesco got in trouble with back in 2014,” he said. “When sales aren’t coming through, you still have to hit profit targets. So if you’ve got a significant proportion of your profit coming in through this kind of monies then you will look to book it as soon as possible.”
An investigation by the Groceries Code Adjudicator found Tesco’s £250m profit overstatement in 2014 was linked to the inclusion of commercial income from suppliers in the wrong accouting period and without accruing for costs – as well as invoicing suppliers for shelf promotions that it failed to carry out.
Futter added: “If you’re reliant on this kind of commercial income in your profit numbers, then you’ve got a problem with your business because you’re not getting the profit delivered by sales. That’s when the alarm bells would ring.”
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