Retail outlets in hospitals have grown to be the second-highest revenue earner for WHSmith’s travel arm, even outstripping the UK brand’s previously buoyant railway station stores.

The company has reported that its profits for the year ending 31st August are ‘in line with expectations’ but also announced that its international travel divisions have experienced strong growth. Hospital retail outlets have emerged as a slightly surprising runner up to airport-based WHSmith travel sites.

Travel is an aspect of their portfolio the British retailer is keen to develop, having bought US travel accessory retail chain InMotion for £155 million in 2018. The company said its 428 stores now open outside the UK are ‘performing well’.

Why hospital stores are open for business

Hospital sites have become an important launchpad for a growing number of UK retailers in recent times. For example, Colchester Hospital’s multi-million-pound refurbishment includes making space for WHSmith, but also M&S Food to Go, Costa Coffee and Stock Shop.

Such opportunities are sought after by retail directors and executives as hospital patients and their visitors are a ‘captive audience’. They are often seeking distraction and in the frame of mind to treat themselves.

The NHS is also a huge employer, all adding to a retail sector with an estimated revenue value of £2-3 billion a year.

NHS trusts have been keen to point out that inviting retailers is not about monetising space that could have been used for mainstream healthcare. It is a way of adding ‘patient value’ to sites. However, the revenue from hospital retail arrangements has funded new reception areas, for example.

Are hospital’s becoming micro high streets?

So far, there has been an emphasis on establishing familiar high street names inside hospitals, to provide patients and families with the reassurance of brands they already trust. This has been deemed a good way of responding to the stress levels of customers within healthcare settings.

In some cases though, the hospitals have taken popular concepts and developed their own retail brands such as Nottingham NHS’s Coffee City and NHS Scotland’s Aroma coffee shops.

Another reason that there has been relatively less involvement from smaller or more experimental private retail companies is that square footage in hospitals tends to come with a high price tag.

Though that’s not to say entrepreneurial retail executives of smaller brands aren’t considering the possibilities, especially as the search for alternative revenue streams is also now being seen within GP surgeries as well.

However, there is pressure on healthcare decisionmakers to only tie up deals with brands linked to healthy eating and lifestyles, of course!

There is also a need for the companies involved in hospital-based retailing to invest in recruitment and training that responds to the special challenges that a healthcare setting presents.