Travel: Terminal shopping

THE JOKE about Heathrow airport used to be that it was a shopping centre which happened to have parking space for a few aircraft. With the opening of a new 12,000 sq ft retail area at Terminal Four, you now really cannot see the planes for the shops.

It's all part of what Barry Gibson, the British Airports Authority's group retail director, calls a 'world-class retailing experience'. If you are wondering what that is, the new shops include Jaeger, The Scotch House, Harrods, Mappin & Webb, Cartier, Gucci, Austin Reed Shirts, Aquascutum and Ferragamo.

If you imagine that a world-class retailing experience means a world-class opportunity to part travellers from their money, you would not be wrong. The Swiss watch company Swatch, which has opened a 'stand-alone' shop at Terminal Four, expects to earn pounds 2.5m in its first year. Bally is disproving the dictum that you cannot sell shoes at an airport: this year the company plans to net pounds 3.5m. Mappin & Webb's shop at Terminal Three is the biggest outlet for Rolex watches in the UK.

This year BAA will earn pounds 291m from retail sales, 32 per cent of its total revenue. It says this is good for all travellers as it permits investment in new projects such as the Heathrow Express rail link and the planned Terminal Five (which will need investment of more than pounds 800m).

And BAA, which was privatised six years ago, needs the money from retailing because it has been required by the Government to keep landing charges low. With duty-free sales of liquor and tobacco fast declining, the future lies in tax-free luxuries: 60 per cent of Heathrow passengers are in the AB socio-economic groups, so there are plenty of takers.

The BAA, however, is at pains to point out that its prices represent good value for money. The term that strikes horror into Mr Gibson's heart is 'rip-off'. 'I accept that we were expensive, that we didn't offer a good deal. That's all changed - our research shows that people now realise we offer fair prices. There are other airports - particularly in the US - which are stealing from their customers.'

Interestingly, BAA's duty-free sales of drink and tobacco are down by pounds 5m-pounds 7m a year because of the Single Market, which requires duty-free shops to police themselves by selling customers only their legal allowance. So were travellers buying more than their legal allowance? 'It's not for us to say,' Mr Gibson says.