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Airports

Retail battles for supremacy with F&B

10 May 2018
Traditional Singaporean Peranakan building facades adorn a wall in the Heritage Zone in Terminal 4 at Singapore Changi Airport. Source: Changi Airport Group

The glamour of airport retail is not what it used to be, with the latest annual results suggesting a shift in power towards food and beverage

The full-year 2017 results of major airport groups – at least in Europe – suggest that the food and beverage (F&B) business is growing faster than duty-free shopping. This was also the case in 2016 and suggests a realisation that F&B is where renewed focus should be.

Despite the undisputed pulling power of luxury brands and well-known retail names, the guarantee of passenger spending is more likely on the F&B side. This is no surprise if one considers that eating and drinking are necessities for the passenger journey, while retail products are always just an option.

At Amsterdam Schiphol, retail spend per passenger in 2017 declined by EUR0.30 (USD0.35) to EUR13.35, while F&B grew from EUR4.32 to EUR4.68. Due to passenger growth, total combined turnover of F&B and retail increased from EUR164 million to EUR181 million.

“A worldwide trend – both downtown and in airports – is a lower spend in physical stores due to a higher online spend,” Tanja Dik, Director Consumer Products & Services, told Jane’s . However, this trend does not affect F&B.

At Frankfurt there was also strong passenger growth, driven by high demand for Lufthansa flights and the opening of a Ryanair base that brought large-scale low-cost carrier traffic to the German hub for the first time.

Here, too, F&B trumped retail. “F&B and other directly travel-related and consumer-driven categories actually outperformed passenger growth due to a wide and flexible offer, which is constantly adapted to our target groups,” explained Fraport retail spokesperson Anja Döring. “Traditional retail shopping could not keep up with passenger growth due to a strong euro, lower-spending Chinese passengers, as well as a general dilution effect, in terms of spending power, of our passenger base due to LCCs.”

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