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Comment: travel retail continues to fly

Back in the mid-90s Barry Gibson, the CEO of department store group Littlewoods, made the surprising move to head up retail at BAA (British Airports Authority)…. View Article


Comment: travel retail continues to fly

Back in the mid-90s Barry Gibson, the CEO of department store group Littlewoods, made the surprising move to head up retail at BAA (British Airports Authority). It seemed like a rather odd decision but when questioned on the move he told me he had the opportunity to take out the boring retail offer at airports and replace it with effectively department stores of selected brands at each terminal.

His strategy proved to be incredibly effective and he revolutionised shopping at airports and over time his actions have arguably impacted the quality of retail at all types of travel hubs around the world. The model Gibson so successfully developed, initially at Heathrow, was the blueprint for the overhaul of travel retail globally.

One of the beneficiaries of this revolution over the years has been WH Smith. Although the business has been retreating from many high streets around the UK its presence in airports and train stations around the world continues to grow. Its recent half-year results revealed its travel division represented over 70% of group sales and 85% of its profits. It clearly had a serious wobble during Covid-19 but is now benefiting from ongoing strong recovery in passenger numbers.

The company opened 62 new travel stores in the first six-month period of the financial year and it has a pipeline of 120 outlets to satisfy its expansion objectives for the next three years. Helping the company’s growth plans are the development of new store formats, which have seen WH Smith extend into new categories. To increase its health & beauty exposure it has recently agreed a deal to launch Holland & Barrett concessions in its Heathrow, Gatwick and Euston rail station stores.

For technology it has been rolling out its tech-focused format InMotion and it has opened its first unit, selling high-end souvenirs, in the UK initially at the two Gatwick terminals and St Pancras International train station. These will sit alongside the many luxury brands that have proliferated in travel retail, such as high-end Italian brand Moncler that recently opened its latest travel retail unit at Heathrow Terminal 3, which continues to build on the Gibson-built foundations.

Where we have seen the most action in travel hubs is with the food offer. Again WH Smith has been getting in on the action with its introduction of new premium third-party food-to-go brands into its outlets such as Yo! Sushi, Crussh and M&S. By adding more chiller space for these brands its food sales have shot up 54% compared with 2019.

Meanwhile, Greggs, Puccino’s, FCB Coffee and Vagabond wine bars have been expanding their presence in travel hubs. Such has been the success of the first Vagabond unit at Heathrow airport that a prime site is set to swing open its saloon doors in Gatwick later this year along with a sister bar called South Downs that will have a focus on English wine.

Newcomers to the travel sector with units planned include Breakfast Club, which has partnered with travel specialist SSP to open a number of units in the UK, Time Out Market, which is developing a multi-operator proposition, and BoxPark that is to shortly open its BoxHall concept that it has designed for a unique Arcade space right next to Liverpool Street station.

Although travel retail has had its disruptions from the pandemic, just like every other part of the retail landscape, it seems to be immune to some of the uncertainties that pervade other parts of the industry. While people are flocking back to their holidaymaking and travel the rest of the industry is contending with the impact of work-from-home on city centre trading, the costs associated with high street properties, as well as the continued dearth of footfall in many locations.

Littlewoods department stores might be gone, as is BAA since it was acquired, but the legacy of Gibson lives on in travel hubs globally that today offer some of the most successful retail environments around and as such continue to attract retailers of all descriptions.

Glynn Davis a judge for The Retail Bulletin’s inaugural People in Retail Awards. With entries due to close on 12 May, don’t miss your chance to enter here

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