WHSmith boss: Tariffs more likely to bring price cuts than inflation

WHSmith boss Carl Cowling has claimed that the Trump tariffs are more likely to result in price cuts than inflation for many UK retailers, as suppliers in east Asia look for alternatives to the US.

Although many economists have argued that increased trade barriers could drive global inflationary pressures, the CEO insisted that there was “no logic” to the inflation fears, The Guardian reported.

Cowling said: “I don’t think there is any logic in why there would be inflation. You could argue it would be the other way around and stock will free up, and it is more likely to be that than inflationary for the UK.”

He said that any changes to prices or sourcing were unlikely to be swift for the retailer since its stock orders were “locked and loaded” until after Christmas.

He said: “We know exactly what product and packaging we are getting, what we are paying and have got orders committed.”

The executive claimed that trading in the UK was “pretty robust” with its airline passenger bookings marginally up year-on-year over the summer, as well as ““no softening in numbers at all” during recent weeks.

“While we are on top of the detail and mindful of it, I don’t thing we are going to be impacted in the way other retailers [selling, for example] fashion might be,” he noted.

WHSmith reported that its high street business had seen its trading profit plunge more than 30% yesterday, ahead of its sale to Hobbycraft owner Modella Capital.

The group’s division pulled in a profit of £15m in the six months to 28 February, down 31.8% from £22m the same time last year. Sales also fell an additional 7% to £239m.

However, the company’s travel arm saw a 12% increase in trading profit to £56m during the half, as sales rose 6% to £712m.

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