"Christmas shopping at the airport is cheaper than in the high street. Or is it?"

Sunday, December 5, 2004

`A fine really would dent your Christmas allowance'/ Christmas shopping at
the airport is cheaper than in the high street. Or is it?
By Fred Mawer in Terminal 3 at Heathrow
United Kingdom - The London Sunday Telegraph


You're taking a flight from Heathrow in December. You've got a Christmas
list as long as your arm. Wouldn't it make sense to combine the two - and do
all your Christmas or other shopping at the airport? Many people do, as our
box of facts and figures makes clear.

Certainly, you won't be stuck for choice: at Heathrow, Terminals 3 and 4, in
particular, are like glorified shopping malls, with Harrods, Liberty, Paul
Smith and Mappin&Webb to name just a few of the many high-end outlets. To
these you can add branches of Hamleys, Dixons, Virgin Megastore and HMV,
and, in the World Duty Free shops, a range of perfumes, wines, spirits and
chocolates to compete with the best department stores and off-licences.

There are a couple of other good reasons for shopping at the airport. The
outlets are likely to be less crowded than those on the high street in early
December. You don't even need to lug your shopping on holiday with you: the
BAA, which runs Heathrow and six other UK airports (Gatwick, Stansted,
Edinburgh, Glasgow, Aberdeen and Southampton), offers a Shopping Collection
Service (see overleaf), which allows you to leave your purchases at the
airport and collect them after your return flight. And, of course, it is
generally assumed you'll pay less than you would elsewhere.

But will you? The BAA claims that airport prices are lower than those on the
high street. "The best things cost less at the airport," is the message on
the cover of its Christmas promotions catalogue. When duty- and tax-free
shopping for passengers travelling within the EU was abolished in 1999, the
BAA pledged to maintain "tax-free" prices for all travellers passing through
its terminals. The pledge, which applies only to "airside" shops - that is,
those after security control - means that an item subject to VAT is sold at
the equivalent of a VAT-free price compared with high-street prices. This
works out at around 15 per cent lower than the high street. Prices are only
properly tax free - that is, minus the full 17.5 per cent - for travellers
flying outside the EU.

BAA's World Duty Free stores also promise bigger savings on perfume (up to
40 per cent) and alcohol (up to 50 per cent on some ranges for those flying
outside the EU, but mostly up to 20 per cent for all travellers). Savings
are marked on price labels by comparing what is described as the "average UK
high-street price" against the airport price. But as we all know, prices in
the high street can fluctuate and are themselves subject to special
promotions and three-for-the-price-of-two type offers.

To find out whether it's really cheaper to shop at the airport, I prepared
two shopping lists - one for Christmas gifts and one for the more prosaic
items that you might buy before a holiday (see below). I found prices for
all of the items on www.amazon.co.uk, at my local supermarket and at
Superdrug (known for its keen prices) in Bath. On the couple of occasions
that items weren't sold by these retailers, I found the prices in other
local shops. Armed with this information, I set out for Terminal 3 at
Heathrow.

Of the 12 items on my Christmas shopping list, three were cheaper at
Heathrow: the iPod, perfume and Piper Heidsieck Champagne. The 70cl bottle
of Glenfiddich whisky was cheaper at Heathrow but the one-litre bottle more
expensive. For all the other items, I would have made significant savings
shopping on the internet or in the high street, ranging from a saving of
eight per cent on the digital camera, to 40 per cent on Michael Palin's
book.

Had I bought the whole list, ignoring special offers on multiple purchases
for the Champagne and chocolate, it would have cost me pounds 1,295.25 at
Heathrow, compared with pounds 1,204.07 on the internet/high street. In
other words, shopping at Heathrow would have cost me an extra pounds 91.18.

Sure, without the VAT to pay, something like a Harrods teddy bear bought
from one of the airport Harrods instead of its Knightsbridge store, or a
pair of pyjamas purchased from Thomas Pink in Terminal 4 rather than its
Jermyn Street shop, costs around 15 percent less.

But when it comes to products that are widely available, such as cameras,
CDs and chocolate, prices offered by a big internet retailer such as Amazon
or a big supermarket chain such as Sainsbury's often undercut those offered
by BAA's shops, even though the items in

the airport shops are effectively tax free. It appears the same can be true
even for alcohol.

As for the shopping list of travel items, five were cheaper on the high
street, four were cheaper at Heathrow, and three were priced the same. Had I
bought the whole list, ignoring the offer on four rolls of film at Heathrow,
my bill would have been pounds 63.25 at Heathrow, pounds 62.12 on the high
street. So when it comes to buying your holiday necessities, the lesson
seems to be: shop where it's most convenient. High street or airport,
there's very little in it.

What did strike me about shopping in Terminal 3, though, was the lack of
competition. For example, there is only store specialising in electrical
items (Dixons), one in CDs/DVDs (Virgin Megastore), and one chemist (Boots).
If more floor space were devoted to these kinds of stores, and less to
upmarket fashion shops, then surely prices for cameras, CDs, sun cream - the
kinds of things travellers want to buy regularly - would drop.

Another point that is easy to forget is that you won't make savings on items
that are not subject to VAT. These include magazines, books, children's
clothes, prescription medicines and some food items (the last category is
very complex: for example, smoked salmon is zero rated, but chocolate and
sweets have the standard 17.5 per cent rating).

But there is another important factor that mitigates against saving money by
buying all your Christmas presents at Heathrow: if you are travelling to a
destination outside the EU, any goods you buy after security control at a UK
airport count as part of your traveller's allowance through Customs - not
only at your destination, but also on your return to this country.

The UK allowances for travelling from a non-EU country into the UK are 200
cigarettes; 60ml of perfume; 250ml of eau de toilette; two litres of still
wine; one litre of spirits or two litres of fortified/sparking wine; and
pounds 145 worth of "other goods". Anything you buy above these limits, you
are legally obliged to declare on your return - you may well think that your
pounds 145 allowance for "other goods" could be better spent at your
destination.

It would be naive to pretend, of course, that everyone sticks to the legal
limit - but if you do get caught, you will have to pay not only the tax but
possibly a fine as well. Now that really would make a dent in your Christmas
shopping allowance.

If you want to shop at the airport, but wonder how on earth you'll carry all
those purchases with you while you're on holiday, then the BAA has the
answer. Its Shopping Collection Service is useful if you want to buy
something heavy, bulky, valuable or fragile to take home. You pay for the
goods on departure at individual retailers, are given a receipt, and when
you return (it has to be to the same airport) you visit a collection desk
(normally in the terminal's arrivals hall) where the goods should be waiting
for you. Best of all, the service is free. It is available at BAA airports
to travellers flying within the European Union, including all domestic
United Kingdom flights.

Dixons offers a home-delivery service for items bought from its airport
outlets. The service is intended for bulky items such as TVs, DVD players
and hi-fis, but is available for any product. Again, shoppers must be
travelling within the EU or the UK. Outlets are located at all terminals at
Heathrow and Gatwick, and many other UK airports. There is a pounds 5.99-
pounds 12.99 delivery charge.

Bear in mind that if you want to buy, say, a bottle of Champagne or perfume,
you can purchase them at the small arrivals duty-free shops located after
Customs at terminals at Heathrow and Gatwick. Prices are the same as in the
duty-free shops in the departure lounges.

Further information

The answers to many shopping queries can be found on the British Airport
Authority's information line (0870 000 1000) or its website (www.baa.com),
which includes a list, with contact phone numbers, of all the shops in BAA's
airports. The BAA produces guidebooks, with maps, showing the location of
all the shops at Heathrow, Gatwick and Stansted. The guides are widely
available at the airports.

The BAA offers a "Worldwide Money Back Guarantee" for the vast majority of
items bought at its shops (mobile phones are one exception). The guarantee
means that if you change your mind about a purchase, and return the item by
post within three months of purchase, you are promised a full refund. You'll
also be reimbursed postage costs above pounds 1. For details of allowances,
contact Customs National Advice Service (0845 010 9000; www.


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