Spending on Britain's high streets continues to be "constrained", WH Smith boss Steve Clarke warned, as the retailer revealed drooping sales figures.
Sales at stores open more than a year fell 4% in the 20 weeks to 18 January despite an improvement in trading at the group's shops in travel hubs which benefited from a pickup in air traffic at airports.
Analysts said underlying sales at these travel stores were flat to slightly up in the second half of the period, the best performance in five years, as like-for-like sales fell by 6% in high street locations.
Clarke said: "High street footfall was challenging in November and December. It's wise for us to plan cautiously as high street consumer spending is still constrained by disposable income being squeezed."
Underlying sales of books were particularly poor, down 7% to 8% according to analysts, amid severe price deflation after a weak year for biographies – apart from former Manchester United manager Alex Ferguson's book – while sales of stationery and newspapers all fell.
The poor book sales are in contrast with the privately-owned retailer Waterstones, which said its sales of hardbacks and paperbacks were up over Christmas.
However, WH Smith shares rose 2.7% to £10.43 amid the glimpse of sales improvement and as the company said it had found a further £2m of cost savings through trimming staff and marketing budgets.
"Consistency is the hallmark of WH Smith and management has again delivered," said analyst Kate Calvert of Investec.
Profit margins also improved, partly as a result of a switch to more profitable goods, but also because the retailer got stocks of its festive goods right and was not forced to discount leftovers heavily.
Clarke said: "There is still lots we can do to drive margin and more work on cost savings if like-for-like sales continue on these trends."
He insisted that customers were "comfortable" with the introduction of more self-service tills in stores and that most of the company's cost savings were in behind-the-scenes efficiencies which most shoppers would not notice – despite a Twitter account devoted to identifying grubby WH Smith carpets.
"What is important is that the product is on the shelf at a decent price and they can get in and out of the store quickly. It's a very functional experience at WH Smith," Clarke said.
Meanwhile, he said the volume of goods sold via its Funky Pigeon online card and gifts store rose 20%, although Clarke declined to give details on what that meant for the value of sales.