WHSmith’s cost-cutting strategy has worked well so far, but when is the tipping point set to happen?

“Bar of Dairy Milk sir? It’s only £1.” There is, of course, only one place where you hear this line being trotted out: WH Smith. And if that wasn’t irritating enough (thinks - “I came in here to buy an A4 pad, a book and a pack of felt tip pens - isn’t that what WHSmith is all about”), there is also the matter that the store has looked a little scruffy and it’s actually been quite hard to find what you wanted.

Still, you can’t argue with profits and the ongoing business of cost-cutting that has characterised the retailer’s activities over the last few years, seems to be continuing unabated. The underlying question however is when does the tipping point occur?

Is there a line that can be drawn over which a retailer strays into the territory of providing an unacceptable store interior - sufficiently so that shopper tolerance is exhausted and they begin to decamp? The choice facing WHSmith seems to be getting more and more stark. There will come a day when every last cut that could be made had been executed and then it becomes a case of store interior asset stripping or investment.

There are those who might consider that this process has been taking place for a number of years now and the surprise is that customers have kept faith. Yet when the retailer provided a trading update last week, it was evident that there has still been room for manoeuvre insofar as cost-cutting is concerned.

There is however one nagging doubt about the WHSmith modus vivendi - what about brand loyalty? We hear so much about the term and it is so closely related to the way a store looks that surely what has been going on at this retailer must have been having an effect.

It is probable that for some, entering a high street WHSmith today is little short of a distress purchase - if you were looking to set up shop in the current climate this model is possibly not the way that you might choose to go.

Medium to long term the wisdom of the approach still looks tricky. If we all feel a mite down-at-heel, having that sense reinforced when we go shopping does not sound like a recipe for loyalty.