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Perception of WHSmith plummets after Airport VAT scandal

WHSmith has been hit the most following the Airport VAT exposé, which found retailers are demanding boarding cards be shown at point of purchase to avoid paying tax.

YouGov’s brand index data, which tracks consumer perception of brands, found WHSmith’s perception is at its lowest in two years after being caught up in the scandal.

A report ran in the Independent on Sunday, 9 August, highlighting that the only reason retailers need to scan boarding cards is to avoid paying VAT – a legal practice - but most do not pass the savings on to customers. Boots and WHSmith were used as examples.

The story was quickly picked up by other media outlets and retailers took the defensive – claiming it is only ever a “request”, not a demand – but the line failed to appease disgruntled consumers.

YouGov shows that from the 14 August, WHSmith’s “buzz” scores bombed from the positive to deeply negative in the space of a few days. Boots faired marginally better. Dixons Travel was not tracked for the research.

Neither however has yet seen the type of impact that Boots boss Stefano Pessina’s intervention in the political debate did in late January. Then, Boots saw its Buzz score fall from 7.7 to -4.6.

“Fairly or unfairly, it seems the public has pinned this scandal on WHSmith,” said Sarah Murphy, YouGov BrandIndex UK director. “However, although other measures – such as its Reputation score – fell slightly after the story broke, they have now plateaued. Notably, others – including Purchase Intent – have remained steady throughout the furore. Barring further developments, all the data points to the company riding out this storm.”

It might not yet be over for WHSmith. During its recent financial results for it refused to comment on airport VAT and the extent it had affected profits.

Analysts were quick to estimate that around 15 per cent of WHSmith’s annual sales come from its airport stores which led the Independent to estimate that over the past five years WHSmith has managed to generate £50m.

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