Airport VAT: WH Smith hit more than Boots

August 21, 2015, 3:23 PM GMT+0

Earlier this month a number of retailers were in the spotlight over their VAT practices at the UK’s airports. YouGov BrandIndex data shows how two of the brands involved – WH Smith and Boots – have fared in the wake of the scandal.

Looking across all of the measures, the most notable movement over the past ten days has been in the businesses’ Buzz scores. Buzz measures whether people have heard good or bad news about a brand in the previous two weeks. Looking over the scores since the start of 2014 a couple of points jump out.

The first is that while the story has affected both retailers’ Buzz scores in recent days, it is worth placing it in context – neither 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 plummet from 7.7 to -4.6 in a matter of days. The fall off so far for both retailers has been less pronounced.

The second point is that the airport VAT saga seems to have affected WH Smith more than Boots. Boots’ fall over the last two weeks is not uncharacteristic as its Buzz scores regularly move about a bit. However, the decline in WH Smith’s is significant and unusual for the retailer – in fact, it is its lowest Buzz score in almost two years.

The particular decline in WH Smith’s Buzz score is particularly apparent when looking at the data since the start of August. While Boots’ general path is bumpier, its dip after the VAT story broke is shallower. By comparison, WH Smith’s Buzz score is generally flatter but its declining Buzz scores are more pronounced from 14 August onwards.

Although several of WH Smith’s other brand health measures have declined slightly, it is only Buzz that has fallen off to any significant extent. Some have dipped slightly and then held steady while others have remained unchanged since the story broke.

Sarah Murphy, YouGov BrandIndex UK Director, says: “Of the retailers caught up in the scandal that we monitor, it is WH Smith that has suffered the bigger hit to its perception among the public. Its Buzz score has decreased significantly following the story while Boots has seen a smaller and less notable decline.

“Fairly or unfairly, it seems the public has pinned this scandal on WH Smith. 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.”

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