UK. London Heathrow Airport has confirmed landmark agreements with Lagardère Travel Retail and WHSmith following a strategic review of its travel essentials offer.
Next summer, Lagardère Travel Retail’s flagship brand Relay will make its UK debut in Terminal 2. As reported, Heathrow Airport had issued an open tender for three blended essentials units in the Queen’s Terminal last June.
Heathrow Airport Retail Director Fraser Brown told The Moodie Davitt Report, “That tender effectively sparked a wider review of the essentials category across the airport, including key airside spaces, the secondary satellite spaces, as well as the landside space.
“When we go through these decisions, we’ve got the passenger first in mind, but we are also thinking about our stakeholders in terms of making clever commercial decisions.”
WHSmith will operate travel essentials stores in terminals 3 and 4 and expand its footprint in Terminal 5. It will become the primary airside health and beauty operator in terminals 3 and 4, and offer pharmacy services across terminals 3, 4 and 5.
The ‘blended essentials’ strategy – designed to meet growing demand for a streamlined, multi-category retail experience – will consolidate categories such as books, health, beauty and pharmacy.
Brown explained, “In August 2020, right after the first wave of the pandemic, we opened our first blended essentials store with WHSmith in Terminal 2.
“We wanted to test the hypothesis of bringing together the traditional confectionery, tobacco, news and gifting categories with a pharmacy offer. The primary reason for doing this was to be more productive and make better use of space.
“It fits into Heathrow’s four retail pillars: digital, experience, space and offer.
“Passenger numbers are forecasted to reach 84.2 million this year, notwithstanding the geopolitical challenges. The passenger space hasn’t kept up with that growth, so we need to make sure that we are using every single square metre. Spatial intelligence is key.”
One-stop-shop convenience
WHSmith UK Travel CEO Andrew Harrison commented, “This agreement is the latest step in the successful long-term partnership between two major British businesses at the forefront of travel retail, Heathrow and WHSmith.
“Our innovative one-stop-shop format is a proven model, and we are delighted to be taking a significant step forward in our health & beauty and pharmacy proposition across Heathrow. We look forward to welcoming many more passengers on their journeys through Heathrow in the years to come.”
The WHSmith one-stop-shop format across terminals 3, 4 and 5 will include Smith’s Family Kitchen food range, an extensive coffee and bakery offer, as well as health and beauty products from recognised brands.
The Lagardère Travel Retail agreement covers four Relay stores in T2 with a total retail space of 1,360sq m. The upper-level departures shop will feature a pharmacy alongside Relay’s travel essentials mix.
The lower-level store will offer books, souvenirs, toys and food and drink to go. A further satellite store will include Lagardère Travel Retail’s Discover souvenir concept, while another Relay location will open in the landside check-in hall.
Brown told The Moodie Davitt Report, “It [Relay] will be a truly UK brand – not a cookie-cutter concept brought over from Paris Charles de Gaulle, Milan or Madrid. While it will follow many of the same principles, this will be a uniquely Lagardère-curated experience for Heathrow.”
As an example, he noted that traditionally Relay has a red colour palette. However, at Heathrow it will don a black façade to fit in with T2’s aesthetic.
Lagardère Travel Retail UK & Ireland CEO Peter Newbould said, “Heathrow is among the very best airports in the world for its commercial mix and customer service, and we are absolutely thrilled to have the opportunity to bring Relay to the Queen’s Terminal.
“Our aim is to meet and even exceed the high standards Heathrow has set, with a dynamic concept attuned to passengers’ needs. I am grateful to my team for their hard work on this project and to Heathrow for their trust.”
“Relay’s debut at Heathrow is a huge satisfaction for our company,” added Lagardère Travel Retail Chief Executive Officer Frédéric Chevalier. “It is a sign of trust in our ability to deliver retail concepts that resonate with travellers in the UK, and to adapt our offer to each travel environment.
“Heathrow is renowned for its progressive and inventive approach to commercial activities and we are delighted with this opportunity to build our partnership with them. Following on from Relay’s recent debut in Türkiye at Antalya Airport, this is another major development for our flagship travel essentials brand – and there are more to come.”
Brown added, “Lagardère’s product offer will be tailored to T2 demographics with a focus on both European passengers and travellers to the Indian subcontinent and the Far East. Apart from the traditional essentials mix, Relay will feature slightly more aspirational gifting items in the assortment.”
Both Lagardère and WHSmith will integrate self-service payment machines and digital screens in the new stores.
Brown noted, “The screens will be used intelligently, alongside a physical analogue design, to provide relevant information – as most purchases will be impulse-driven or based on immediate need.
“Heathrow is also mindful of ensuring that pricing, particularly in categories such as essentials and F&B, is fair and reasonable. Our relationship with Lagardère and WHSmith includes an element of collaboration with Heathrow on the pricing of key items.”
Change in motion
Last week, Heathrow Airport announced a £10 billion (US$13.5 billion), five-year investment plan from 2027 to 2031 (click here to read our coverage). It will be able to serve 10 million more passengers a year, a +12% increase in capacity compared to today.
Heathrow is planning the redevelopment of the Central Terminal Area and seeking planning permission to demolish the old T1, extend T2 and build a new southern road tunnel to improve access.
Brown said, “We’re trying to continue on the journey to be an extraordinary airport fit for the future.”
The lack of a tax-free shopping scheme in the UK remains a point of concern, with Heathrow continuing to press for change.
“We still believe that the UK is an economic anomaly,” emphasised Brown. “We need to introduce a tax-free shopping scheme for both high street retailers and for airports and ports. We are missing an opportunity with both European and non-European visitors.
“We continue to share data with the UK government on the impact this policy is having. We respect the challenges the country – and the government of the day – face in terms of their fiscal position.
“But we argue that introducing tax-free shopping is affordable and would deliver a net benefit to the UK economy in terms of spending.” ✈
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