Heathrow brings more brands – and more formats – into the mix

By Kevin Rozario | Wednesday, 12 August 2026 15:53

London Heathrow is pivoting its convenience offer as blended retail takes a more central role. We examine some of the new concepts…

Capacity-constrained London Heathrow (LHR) managed growth of +0.7% last year to reach nearly 79.9m international passengers (and 84.5m in total), securing second place after DXB in ACI World’s busiest airports for international passenger traffic ranking. It also remained the only western European hub in the league table to be ahead of pre-Covid traffic.

One of LHR’s key advantages is that it is a very well connected gateway with 226 destinations and ranked first in OAG’s latest Top 50 Global Airport Megahubs Index. Not wanting to lose that advantage, it is pushing hard for a third runway that will enable it to expand its connections further and unlock faster passenger growth.

The project is being backed by a £49bn/$64.6bn* privately financed masterplan with an ambitious delivery timeline of a decade from now. As well as building a new runway, the ambitious project includes the addition of new terminals, plus new satellites for existing terminals. This could significantly expand the retail and F&B offer at the airport from its current 58,600sq m. Much of that is operated by Avolta which runs the main duty-free stores at the airport’s four terminals.

Revenue from retail concessions was under pressure last year. As the biggest component of the retail income stream, concessions brought in £293m/$386.5m, a -2.3% year-on-year (YOY) decrease. Catering made up for some of that decline, rising +7.9% to £96m/$126.6m helped by longer opening hours, while other retail components such as car parking and non-concession retail also made gains. This enabled total retail revenue to grow by +2.5% to £791m/$1,043.3m last year.

Blended retail makes headway to Heathrow

Nevertheless, with retail concessions in decline it looks like changes are afoot to adapt more fluidly to the way passengers shop – and to give them what they want in a more efficient and practical way.

Fraser Brown, Retail Director, Heathrow Airport. — Image Credit: Heathrow Airports Limited

This is encapsulated in the concept of blended or hybrid retail, and two examples were inaugurated this year when WHSmith opened three flagship stores in terminals 3, 4 and 5 in April, and Lagardère Travel Retail’s UK debut of its convenience/travel essentials brand Relay in T2 in May, with a further three stores scheduled to open progressively over the course of this year.

Both retailers’ formats are essentially one-stop shop concepts. WHSmith’s stores combine everyday essentials including a range of health and beauty products including its own-brand range called Roame, plus food and drink, coffee-to-go, tech accessories and pharmacy services under the Well Pharmacy brand, staffed by healthcare professionals.

Relay’s T2 offer is similar in that it brings to life travel essentials, food-to-go, pharmacy services, and souvenirs and gifts under one roof. Where it differs is that it has partnered with Waitrose – a recognisable, upscale national supermarket brand for its food-to-go offer – and with regional pharmacy, Paydens, for its pharmacy service. This includes a wellness range of beauty products that does not compete with the main duty-free store in the terminal.

Heathrow Airport Terminal 2 (The Queen’s Terminal). — Image Credit: Heathrow Airports Limited

The blended proof of concept was tested back in 2020 and is now in full flow. Fraser Brown, Retail Director at Heathrow Airport, tells TRBusiness: “We’re absolutely clear that blended retail is the right thing to do in the departure lounges at Heathrow where we are so tight on space. We all know that non-aeronautical income is under pressure. By blending everything together we’re using space intelligently and delivering a strong offer and a one-stop shop.”

Lagardère’s arrival on a big scale at Heathrow will step up competition at the hub. The French travel retailer’s CEO Frédéric Chevalier told TRBusiness: “Heathrow is a global flagship airport and Relay is the largest brand in its category in travel retail – it’s a message. Relay is a powerful brand and Heathrow wants the best.”

With a foot in the UK door, Lagardère is likely to push hard to establish Relay at other locations once it has proved its worth at LHR.

In duty-free, LHR is one of Avolta’s most important locations and CEO Xavier Rossinyol, told TRBusiness: “We super happy with the relationship we have at Heathrow. It works very well because our focus, and that of the airport and brand partners, is on the traveller, which is key.”

Avolta has also been a strong advocate for hybrid retailing. Asked if we might see cafés in its Heathrow duty-free stores, anytime soon, Rossinyol said: “It will depend on what the passengers want and, of course, the physical limitations. Beyond that I am open to anything that improves the customer experience.”

Implementing DESO

At a strategic level, Heathrow is implementing a retail plan focused on digital, experience, space, and offer (DESO) and one example of that is its Reserve & Collect service, launched last year. Ross Baker, Heathrow’s Chief Customer Officer notes, too, that the passenger experience was boosted through new retail and dining options such as M&S Airside, Lululemon, and Five Guys in T5, alongside premium upgrades like the refurbished Windsor Suite and new lounges.

Poet David Larbi’s lyrical tribute to Heathrow, for its 80th anniversary, is visible only to passengers flying in and out of the hub. — Image Credit: Heathrow Airports Limited

Brown describes Heathrow as the “most intense place on the planet” to trade. “Per square metre, these are some of the biggest stores in the world for many of our retail partners,” he adds. LHR is routinely scouting the market to identify potential new entrants with the ability to reach a commercial deal with minimal disruption and delay, for example, by tendering locations to businesses that could make immediate use of a structure “as is”.

The airport is also in continued dialogue with officials in the UK Treasury around pitching for an alternative solution for the reintroduction of VAT-free shopping for departing passengers. It is also eyeing the opportunity to introduce duty-free shopping for arriving passengers.

In a June 2026, investor report, Heathrow noted further commercial progress such as a new VIP online booking portal, the introduction of premium retail and F&B brands, and says that works are “progressing well” for its T5 departure lounge luxury zone.

Conceptual image of Heathrow’s third runway. — Image Credit: Heathrow Airports Limited

The airport also saw a benefit from the closure of airspace in the Middle East in Q1 2026. This led to an increase in transfer passengers across LHR’s network, bumping up traffic by +3.7% YoY to 18.9 million. In turn, retail revenue grew by +5.3% in the period. While the hub has temporarily absorbed demand from elsewhere, passenger numbers for the rest of the year are likely to be negatively impacted if significant uncertainty in the Middle East persists.

The expectation for 2026 is that passenger volumes will fall below guidance published in December 2025. Evaluating the potential implications of further conflict escalation, rising fuel costs, and weakening consumer confidence, all of which are downside risks to passenger demand, LHR says the best scenario is that it will achieve 2025’s traffic level of 84.5m, but in the worst case this could fall to 80.1m.

*Based on the average exchange rate in 2025: GBP1 = USD1.319.