2022
9
UK Travel Retail Market Report 2022
2022-08-01T04:00:57+01:00
OX1103183
2195
153796
[{"name":"Holiday Booking","url":"https:\/\/store.mintel.com\/industries\/holidays-travel\/holiday-booking"},{"name":"Retail","url":"https:\/\/store.mintel.com\/industries\/retail"}]
Report
en_GB
“As the UK moves out of the turbulent last few years, the population is starting to travel more once again. Although flexible working practices are likely to see commuter footfall…

UK Travel Retail Market Report 2022

£ 2,195 (Excl.Tax)

Report Summary

“As the UK moves out of the turbulent last few years, the population is starting to travel more once again. Although flexible working practices are likely to see commuter footfall remain below pre-pandemic levels, consumers are ready for a holiday. This is good news for the sector, but rising costs, continuing staffing issues and the threat of strike action all loom above the sector. The recovery will not be straightforward and there remain choppy waters ahead.”
–    Piers Butel, Retail Analyst, July 2022

This Report discusses the following key topics:

•    Market drivers for the travel retail sector.
•    Impact of and recovery from COVID-19.
•    Leading travel hub operators.
•    Which travel hubs consumers visit and how frequently they go.
•    What consumers purchase in travel hubs and why some consumers do not shop when travelling.
•    Satisfaction with travel hub visited.
•    Behaviours around retail in travel hubs.

 

 

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Market context
    • Products covered in this Report
  2. Executive Summary

    • The five-year outlook for the travel retail sector
      • Figure 1: Category outlook, 2022-27
    • The market
    • Consumers’ financial wellbeing drops again
      • Figure 2: Household financial wellbeing index, 2016-22
    • Despite financial uncertainty consumers are still planning holidays
      • Figure 3: Change in planned consumer behaviour in the next three months, 2021-22
    • Airport footfall severely impacted
      • Figure 4: Total passenger numbers at reporting UK airports, 2017-21
    • Journeys by rail plummeted in 2020 but 2021 saw signs of recovery
      • Figure 5: Rail journeys in the UK, 2017/18-2021/22
    • Car usage plummets after minor peak in 2018
      • Figure 6: Number of trips and miles travelled by car/van drivers and passengers, 2006-20
    • Companies and brands
    • Smart vending bringing speed and efficiency to food and drink retail
      • Figure 7: Costa Express machine with hot and cold drink option, 2022
    • Travel hubs as destinations in their own rights
      • Figure 8: Jewel Changi’s indoor waterfall, 2020
    • The consumer
    • Stations most visited travel hub
      • Figure 9: Travel hub visitation, 2022
    • Railway stations and coach stations are most frequently visited
      • Figure 10: Frequency of travel hub visitation, 2022
    • Consumers at travel hubs are picking up food and drink items
      • Figure 11: Products purchased in travel hubs, 2022
    • Price puts potential shoppers off
      • Figure 12: Reasons not to make a purchase in a travel hub, 2022
    • Travel hubs and retailers should focus on improving pricing and ranging
      • Figure 13: Satisfaction with key factors for travel hub visited most recently, 2022
    • Travel hubs should focus on efficiency to increase dwell time and improve experience
      • Figure 14: Consumer behaviours around travel hubs, 2022
  3. Issues and Insights

    • Flexible working means pandemic has fundamentally changed travel retail
    • Travel hub retailers must focus on value amid cost-of-living crisis
    • Efficient shops lead to happy shoppers
    • Travel hubs can capitalise on rising localism
  4. Market Drivers – The Economy

    • The conflict in Ukraine will hurt the UK economy
    • GDP reached pre-pandemic levels in November 2021…
    • …but the post-COVID-19 bounce-back will be followed by a period of slower growth
    • Employment has held up better than expected
    • Inflation is the key concern in 2022 for consumers, brands and the economy
    • Consumers’ financial wellbeing has slipped from its recent high point…
      • Figure 15: Household financial wellbeing index, 2016-22
    • …and concerns over inflation are coming to the fore
    • Consumers still more likely to plan a holiday despite financial concerns
      • Figure 16: Change in planned consumer behaviour in the next three months, 2021-22
  5. Market Drivers – Tourism

    • Domestic tourism was affected by pandemic
      • Figure 17: UK holiday participation, 2018-21
    • Domestic passengers still low in 2021 despite relaxed restrictions
      • Figure 18: Domestic terminal passenger traffic, 2018-22
    • Chinese tourism plummets as country follows zero-COVID approach
      • Figure 19: Number of visits to the UK by Chinese residents, 2017-21
  6. Market Drivers – Travel Methods

    • Journeys by rail plummeted in 2020 and have yet to fully recover
      • Figure 20: Rail journeys in the UK, 2017/18-2021/22
    • Cost of train travel can be a barrier for usage
      • Figure 21: Percentage change in rail fares at the start of each year, 2010-21
    • Delays have improved since recent low in 2018
      • Figure 22: Percentage of trains classed as on-time, 2017-21
    • Car usage plummets after minor peak in 2018
      • Figure 23: Number of trips and miles travelled by car/van drivers and passengers, 2006-20
    • Despite falling usage car ownership continues to rise
      • Figure 24: Number of licensed vehicles in the UK, by vehicle type, 2017-21
    • Motorway traffic flow plummets across the country
      • Figure 25: Average daily motor vehicle flow for major sections of the motorway network, 2018-20
    • Airport footfall severely impacted
      • Figure 26: Total passenger numbers at reporting UK airports, 2017-21
  7. Launch Activity and Innovation

    • Just Walk Out in the airport
    • WHSmith rolls out InMotion stores in the UK
      • Figure 27: WHSmith InMotion store, Stansted, 2022
    • Smart vending providing easy on-the-go options
      • Figure 28: Costa Express machine with hot and cold drink option, 2022
    • Jewel at Changi Airport offers food, fun and Instagram-worthy snaps
      • Figure 29: Jewel Changi’s indoor waterfall, 2020
    • Parcel collection lockers in transport hubs across Singapore
    • New immersive concepts to help boost footfall and dwell time
  8. Travel Point Operators – MSAs

    • Recovery, takeovers and significant site developments
      • Figure 30: Summary of the leading UK MSA operators, 2022
    • Moto post-COVID-19 lockdown recovery and brand new flagship site
    • Welcome Break trading rebounds after a challenging 2020
    • New owner of Roadchef to accelerate the rollout of fast-charging EV infrastructure
    • Extra MSA sold to a consortium of institutional investors
    • Westmorland’s ambitious new service station on the M56
      • Figure 31: Revenues of the leading MSA operators, 2017-21
      • Figure 32: Operating profit/loss of the leading MSA operators, 2017-21
  9. Travel Point Operators – Railway Stations

    • 23% fall in rail passenger journeys in 2020/21, but numbers nearly back to pre-pandemic level in 2022
      • Figure 33: Stations operated by train operating companies in the UK, 2020/21
    • Big fall in Network Rail retail income
      • Figure 34: Network Rail financial performance, 2017-21
  10. Travel Point Operators – Airport Terminals

    • Smaller airports experiencing faster recovery from COVID-19 travel restrictions
      • Figure 35: Proportion of passengers at UK airports, 2017-21
    • Fewest air passengers in years
      • Figure 36: Air passengers at the busiest UK airports, 2017-21
    • Rebound in revenue as the COVID-19 pandemic recedes
      • Figure 37: Leading airport operators’ revenues, 2017-21
      • Figure 38: Leading airport groups’ operating profits, 2017-21
    • Breakdown of revenues
    • Collapse in passenger numbers drives down Heathrow Airport retail revenue
      • Figure 39: Breakdown of total revenue at Heathrow, 2017-21
      • Figure 40: Breakdown of retail revenue at Heathrow, 2017-21
    • Gatwick Airport predicting a surge in passenger traffic in 2022
      • Figure 41: Breakdown of total revenue at Gatwick, 2017-21
      • Figure 42: Breakdown of retail revenue at Gatwick, 2017-21
    • Manchester Airports Group retail income more than four times previous year figures but well behind pre-pandemic level
      • Figure 43: Breakdown of total revenue at Manchester Airports Group, 2017-21
  11. Travel Hub Usage

    • Travel hubs visited by 69% of consumers
    • Railways remain top of the pile
      • Figure 44: Travel hub visitation, 2022
    • Younger consumers are driving usage
      • Figure 45: Travel hub visitation, by age, 2022
    • Urban consumers much more likely to use travel hubs
      • Figure 46: Travel hub visitation, by area, 2022
  12. Travel Hub Usage Frequency

    • Railway stations and coach stations are frequently used
    • Airports are visited less often but benefit from long dwell times
      • Figure 47: Frequency of travel hub visitation, 2022
    • Frequent visitors tend to be younger
      • Figure 48: Age of frequent (once a month or more) travel hub visitors, 2022
  13. What Consumers Purchase in Travel Hubs

    • Hungry consumers are most likely to pick up food or drink items
      • Figure 49: Urban Express store, London Bridge, Cook food-for-later section, 2022
      • Figure 50: Products purchased in travel hubs, 2022
    • Airport visitors are more likely to shop around categories
      • Figure 51: Products purchased in travel hubs, by travel hub visited, 2022
    • Older shoppers less likely to make purchases
      • Figure 52: Products purchased in travel hubs, by age, 2022
  14. Reasons for Not Purchasing Items at Travel Hubs

    • Lack of a demand for shopping meant over half avoided purchases
    • Price is a serious barrier for consumers
      • Figure 53: Reasons not to make a purchase in a travel hub, 2022
    • Older shoppers less likely to feel the need to make a purchase
      • Figure 54: Reasons not to make a purchase in a travel hub, by age, 2022
  15. Satisfaction with Travel Hub Visited

    • Overall most consumers were satisfied with the travel hub they visited
      • Figure 55: Overall satisfaction with travel hub visited most recently, 2022
    • Airport visitors are the least satisfied overall
      • Figure 56: Satisfaction with travel hubs, by travel hub visited most recently, 2022
    • Consumers are happy with navigation but consider the range limited
    • Price will be key in difficult months ahead
    • Other services remain niche but have potential
      • Figure 57: Satisfaction with key factors for travel hub visited most recently, 2022
  16. Key Driver Analysis – Travel Hub Retailing

    • Methodology
    • Consumers consider price important but aren’t satisfied
    • Range of stores and items available could be improved
    • Other services could provide value but aren’t considered important
      • Figure 58: Key drivers of overall satisfaction with Travel Retail Hubs, 2022
      • Figure 59: Overall satisfaction with Travel Retail Hubs – Key driver output, 2022
  17. Travel Hub Behaviours

    • Pleasant environments and longer wait times lead to more shopping
    • Consumers likely to pick up impulse purchases
      • Figure 60: Consumer behaviours around dwell time and impulse shopping, 2022
    • Travel hubs should tap into rising localism trends
      • Figure 61: Consumer behaviours around quality and product sourcing, 2022
    • New ideas could help re-invent travel hubs but remain niche for now
      • Figure 62: Consumer behaviours around innovations and technology in travel hubs, 2022
    • Checkout-free stores are failing to appeal to older shoppers
      • Figure 63: Consumer opinions around checkout-free stores, by age, 2022
  18. Appendix – Data Sources, Abbreviations and Supporting Information

    • Data sources
    • Abbreviations
    • Consumer research methodology
  19. Appendix – Key Driver Analysis

    • Interpretation of results
      • Figure 64: Overall satisfaction with Travel Retail Hubs – Key driver output, 2022
      • Figure 65: Satisfaction with Travel Retail Hubs, 2022

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