“The opening of our new Johnnie Walker pop-up with Dufry, JCDecaux and Diageo (pictured below) is a good example of something immersive, experiential and important. We need to continually up our game. Across all retail people expect a better experience in the store. It needs to be much more than stacking up a product and making sure it’s spaced properly. So we will drive digital and drive the experience in-store.” Heathrow is also seeking clear, consistent messaging about the value proposition, which is particularly relevant in the duty free categories of liquor & tobacco. With the UK reverting to a duty free pricing regime for EU-bound travellers on alcohol since Brexit, this represents a big opportunity. Brown says: “We will be pushing on a number of fronts on the well-known brands, and demonstrating along with Dufry that we offer value for money versus what consumers would get on the High Street. “But also, in alcohol, there is a sub-category of luxury, in which we can help the brands elevate their experience. We are the best place for them to speak to those luxury consumers because of the demographics of travel retail and of Heathrow in particular.

“We are going to push Dufry hard on the offer part, getting the ranges and getting the price right. That means reinforcing great relationships with big brands such as Diageo, but equally challenging them on Britishness as well, and Sense of Place. We want them to work with British or English winemakers and spirits brands. We did that very successfully together with Chase when that brand was independent [it is now part of the Diageo portfolio -Ed]. We aim to continue to do that, to find British brands, not just in the duty free categories but across the board.” Price, and conveying a price advantage, is more of a challenge in what were formerly the tax free categories, notably beauty and luxury, since the UK government axed airside tax free sales. With beauty such a critical category, Heathrow, Dufry and the brands combined continue to offer VAT-free equivalent prices, so consumers get the benefit at the airport against the High Street – absorbing the difference to remain price-competitive. Brown says: “On beauty I would imagine that we will continue to take the pain of that margin support for the foreseeable future. I won’t say forever, and we will keep everything under review as I’m sure will Dufry and the brands. But we need to be able to demonstrate value versus the High Street. “Communicating the price message is not easy. Before the UK government changed the rules, across the vast majority of categories, if you were flying outside the EU, you didn’t pay VAT, whether you were buying a £10 Accessorize scarf, or a £10,000 Rolex.

“Now we do have a more difficult message to explain to travellers on pricing. Some of the brands we are working with are offering a discount versus the High Street, JD Sports for example. But most luxury brands are not, though some will offer a gift with purchase, or exclusive products that you cannot get on the High Street. “We need to communicate the price and value message through our partners in-store and via heathrow.com at various digital touchpoints. We all have a job to do on that. “There is margin pressure on beauty. But I think if we get the top-line sales right, whether it be on beauty, alcohol or confectionery, then we'll be successful.” More broadly, Heathrow and its partners continue to argue for a form of tax saving that can be applied to airside sales beyond dutiable goods. “On the decision that the UK government took on tax free products, we disagree with it and continue to protest and say it is wrong. We continue to advocate for some form of tax free shopping airside. With the UK having left the EU we are also making the case for arrivals duty free, as a good thing for the aviation sector that doesn’t damage the domestic market. “We continue to lobby government on these matters but meanwhile we will focus on offering value under the rules in place.” Is the message around tax free savings working to date?

The other key pillar on which Brown and his team are rebuilding the offer is space. Here, he says that under the updated agreement, Heathrow will “challenge Dufry to use the space more intensively”. He adds: “Now that doesn’t mean more product each square metre. It could be more experiential, because that ultimately might drive more sales, but we want them to innovatively look at how intelligently and cleverly they are using every single square metre. “Space remains at a premium and we are getting back towards capacity now having re-let some vacant spaces in the terminals. We are not going to be able to build our way to success by providing more space. So they are going to have to work with us really intelligently on how to use the space they occupy. “With this new agreement, fundamentally it gives us three more years to collaborate really strongly on those four pillars of digital, experience, space and offer. “The objective here is simple, and it’s twofold. One, to deliver the best duty free experience. And two, from that experience to deliver world-class financial returns for all of us. And I say it deliberately in that order. If we get the experience, right, I’m an absolutely firm believer that we will get better financial success, for our different businesses and our people.” Brown sees Heathrow’s role as very much a hands-on partner in the retail business, and has previously said that being a ‘passive landlord’ is not its remit. Building on this, he says: “If we weren’t a passive landlord pre-COVID we certainly are not going to be passive through COVID. My team are working incredibly hard with brands like Johnnie Walker and retailers like Dufry to make sure that we deliver the best possible experience, whether it’s the detail of the staffing situation tomorrow, and getting the experience right. Then the money will come.”