WH Smith has walked into a row with post office workers after signing a deal to operate more outlets in its stores.
The retailer expects to open 16 more post offices in its branches, subject to six-week public consultations, under an agreement revealed alongside its annual results yesterday. WH Smith said it has also renewed a contract to operate 82 post offices in its stores for a further five years.
Chief executive Stephen Clarke, who took over from long-term WH Smith boss Kate Swann earlier this year, said the post offices were part of a plan to make the best use of store space and encourage more shoppers to visit.
However, a spokesperson for the Communication Workers Union (CWU) said: "We have grave concerns over WH Smith taking on a further 16 post offices."
Postal workers have been involved in a series of strikes since plans were revealed to franchise around 70 crown post offices, which are currently run by the government-owned service.
The CWU said the deal with WH Smith put the future of post offices at risk. It cited the case of a post office in Runcorn which has now moved to a Tesco store, while another in Grays, Essex, is being temporarily run from a council building.
The union is also concerned about job losses after hundreds of long-term staff were made redundant when WH Smith took on its initial batch of post offices in 2006. However, WH Smith said all staff would be transferred under rules which protect pay and conditions, and no redundancies were planned.
The row overshadowed another rise in profits, in line with expectations, at WH Smith despite falling sales. Pre-tax profits rose 6% to £108m as the company cut costs, improved efficiency and switched to selling more profitable items such as stationery, as sales fell 5% to £1.2bn. Underlying sales, which strip out the impact of new store openings and closures, slid at WH Smith's high street and travel stores, by 6% and 4% respectively, as sales of its core categories – stationery, books and newspapers/magazines – slipped back.
The company expects to open about 40 outlets a year in overseas airports, hospitals and railway stations. In the next half year it will open 20 outlets including its first stores in Russia and Qatar. The company now has 141 international outlets.
It is often criticised for shoddy looking stores in the UK with one Twitter account devoted to picturing its dirty carpets, but Clarke said WH Smith had spent £12m on improvements in the past year and more updates were in the pipeline.