ON LOCATION: First look at new Heathrow T2 retail

By Luke Barras-hill |

Heathrow Retail Director Fraser Brown spoke to TRBusiness in a video interview following the opening of the new 45sq m InMotion boutique at Terminal 2.

In a trade media exclusive, TRBusiness can reveal impressions of two newly opened retail units at Heathrow Airport Terminal 2.

This publication was on site at The Queen’s Terminal this week to speak to Fraser Brown, Retail Director at Heathrow Airport, following the unveiling of the terminal’s first InMotion pop-up boutique (45sq m) late last month.

As the newest retail concession to join the lineup at T2, the electronics and travel accessories pop-up is located between The Perfectionists’ Café (443sq m) and London’s Pride by Fuller’s (491sq m) at departures level 5 (check-in).

“It’s great to have one of our first InMotion stores; it’s a taster of what’s to come from InMotion and the WHSmith Group and we’re really excited at Heathrow to welcome InMotion,” commented Brown.

“We’ve got as much as we can cram into a relevant, small footprint but what I’m really excited about is the concept. A lot of this we are focusing on at Heathrow: the four pillars of digital, execution, giving a great experience by using the space intelligently, and getting the product range right.

FURTHER INMOTION UNITS TO COME

“Tech is very much about a series of brands and the distressed tech purchases and I’m really confident with the knowledge and buying power of WHSmith Group and InMotion.”

WHSmith won contracts last year to operate all 30 technology stores under the InMotion fascia across the UK’s airports.

Eight of the units are at Heathrow.

Terminal 2 will house two more InMotion units as part of a phased rollout of the eight shops across the Heathrow estate in the coming months.

The arrival of the stores follows the well-reported exit of Dixons Travel last year in the wake of Brexit and the UK government’s decision to abolish airside tax free (aside L&T) sales.

“We were sad to see the demise of Dixons Travel; we had a long-standing relationship with them,” said Brown.

“They had eight units at Heathrow, but we are going to see over the next few months those units re-emerge with InMotion and reinvigorated with some great new concepts. I know from the rigorous tender work my team did that we’ve got a really strong offer for passengers here.”

Heathrow and its partners lost a High Court challenge to reverse the ‘hammer blow’ move, which had prompted a tidal wave of criticism from the public, politicians and the retail industry at large.

A petition mounted by TRBusiness rallying attention to the cause drew 12,664 signatures and elicited a response from government.

There are already indications that consumers are shifting their wallet spends away from UK retail following the cessation of the airside extra statutory concession and VAT Retail Export Scheme.

Brown reiterated that ending VAT-free shopping was not a ‘pain-free decision’ by government, causing lost jobs and placing UK airports and the high street at a competitive disadvantage versus their European competitors.

“We describe this as a tourism tax, a backwards step and we continue to lobby government both as Heathrow but as part of the wider industry to get some form of tax free shopping back,” he said.

“Our competitors in France, Italy and around the world will not be standing still. They will be taking advantage of that change and we can already see from Summer last year some of the transaction changes through the VAT companies that consumers are already moving their spending.”

SAINT LAURENT BOLSTERS OFFER

In December, Terminal 2 also opened its doors to a Saint Laurent store (89sq m) at departures level 4 flanked by existing Harrods (102sq m), Burberry (147sq m) and Gucci (149sq m) units.

Aside Saint Laurent and InMotion, Heathrow welcomed four other commercial spaces at T2 last year: JD Sports (340sq m), Big Smoke Taphouse & Kitchen (478sq m), Accessorize (56sq m) and The Bookshop by WHSmith (61sq m).

Athleisure and sports apparel landed for T2 travellers in October with the crowning of a 340sq m JD Sports outlet.

InMotion is situated yards from Asian cuisine hotspot Shan Shui (412sq m), which is due to officially open on 25 January.

Brown characterised Heathrow’s commercial trading performance in December and over the final quarter of 2021 as ‘good on a per-passenger level’ with strength in food & beverage.

However, he described a ‘mixed picture’ for duty free within its individual categories.

As reported, more than 600,000 passengers cancelled their travel plans from Heathrow in December due to Omicron and the uncertainty caused by government travel restrictions as the airport clocked 19.4 million passengers in 2021 – less than one quarter of those served in 2019.

“Alcohol has clearly grown and benefitted from the change in the duty rules, but the vast majority – beauty, P&C and others – are in a difficult place,” added Brown. “We’ve worked with our duty free partner Dufry and our brands in a collaborative way to maintain value, but there’s a margin hit for all of us.

“It’s not as clear to consumers what the proposition is and that lack of clarity is a challenge. Having said that, we are still benefitting as Heathrow and more widely, from revenge spending.”

Stay close to TRBusiness for more on Heathrow Airport…

*Including London Gatwick, London Stansted and London Heathrow Airports

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