Revenge spending ‘unlikely to be sustainable’, says Heathrow Airport

By Luke Barras-hill |

Shops can’t ‘bank’ on revenge spending, says Heathrow Airport.

While Heathrow Airport – like many other operators – continues to benefit from ‘revenge spending’, concern has been raised over the longevity of the consumer phenomenon.

In an exclusive video interview available in the TRBusiness February e-zine, Retail & Property Director Fraser Brown said: “I am worried as we are now in 2022 and are thinking more medium term – I don’t think that [revenge spending] is sustainable.

“We can’t be banking on revenge spend, so we need to continue to evolve, innovate and make our propositions at the airport – be it in F&B, tech or other categories – as relevant as possible for passengers.”

[To watch the full interview with Fraser Brown in the February e-zine, click here; to read more about Heathrow’s approach to luxury, click here].

Heathrow Retail & Property Director Fraser Brown outside the latest Saint Laurent store (89sq m) at Terminal 2.

LOBBYING CONTINUES

Last year, Dixons Travel withdrew from Heathrow and other UK airports due to a combination of haemorrhaging passenger traffic and the post-Brexit demise of VAT-free shopping at airside locations.

As reported, while alcohol has benefitted from the restoration of duty free sales on UK-EU routes, the vast majority of categories including beauty, P&C and others at Heathrow remain ‘in a difficult place’.

“We’ve worked with our duty free partner Dufry and the brands in a collaborative way to maintain value, but there’s a margin hit for all of us,” admitted Brown. “It’s not as clear to consumers what the proposition is and that lack of clarity is a challenge.

“We continue to lobby government both as Heathrow and part of the wider industry, to get some form of tax free shopping back.”

Heathrow opened an InMotion pop-up and Saint Laurent boutique at Terminal 2 recently, revealed TRBusiness.

The airport published its full-year 2021 results last week, in which it reported that passenger numbers fell to 19.4 million – the lowest on record since 1972.

Retail revenue declined by 7.3% year-on-year as a direct result of reduced passenger numbers.


However, the airport operator reported ‘relative resilience’ in the final quarter of 2021 as the relaxation of government restrictions allowed for the reopening of all commercial units across Terminals 2, 3 and 5.

Terminal 4 expects to reopen by July and the airport says it expects to meet its 2022 target of 45.5m passengers.

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