A measure of the recent commercial performance at London Heathrow Airport can be viewed in the full-year results for 2017 and high expectations for 2018. While traffic growth was +3.1% year-on-year, and overall revenue climbed by +2.7%, retail surged by +7.7% in 2017, outstripping these other metrics by some distance. Coming against the backdrop of capacity constraints at the UK hub, the performance last year was a testament to Heathrow’s recent investments, the introduction of new brands and concepts, plus the persistent influence of currency.

The momentum in retail income growth was buoyed by increased penetration in airside retail and greater spend per participating passenger. Sterling’s depreciation boosted revenue too, particularly in duty and tax-free and airside specialist shops. Crucially, food & beverage income growth was buoyed by redevelopments in Terminal 5 and increased penetration airside. And in recent months the Terminal 4 luxury retail redevelopment has started contributing to growth.

Heathrow has provided robust expectations for 2018, partially due to the investments noted above in T4 and T5 but also in T3, with its enhanced luxury offering. Retail income is expected to grow +4.4% to £688 million in the full year. Retail income per passenger is expected to increase by a solid +3.1% to £8.71, lower than an earlier forecast of £8.81 following the appreciation of the pound (though recent weakness in the currency may change the final result).

Traffic forecasts have been upgraded to a projected 79 million passengers in 2018 (2017: 78 million).

Other key projects will also contribute to driving commercial revenue including hotel developments across the campus, the delivery of Qatar, Amex and No.1 Traveller lounges and an enhanced dining proposition in T3.

These additions (with a planned third runway approved too) are being mirrored by the airport’s investment in new digital services. These include the Amazon Alexa Skill tool, which allows travellers to learn more about their flights in real time before they leave home, and a link-up with Locus Labs and Apple to enhance Heathrow’s digital terminal maps.

Other digital partnerships will improve the user experience and should help boost retail penetration levels. Last year, the airport company struck a partnership with technology service provider AOE to create a ‘digital marketplace’ for 300-plus brands at the airport.