Airport Retailing - Europe - June 2008

Airport Retailing - Europe - June 2008

About this report

The volume of air travel has grown at a strong pace in recent years, recovering from the impact of 9/11, and this has benefited retailers operating in airports. In Europe, air passenger numbers have been rising at around 4-5% per annum although this rate accelerated to 6.5% in 2007. The opening up of Eastern Europe has been a factor in this growth as has the continuing rise in popularity of low-cost carriers like Ryanair and easyJet.

This does not mean necessarily that airport retailers will continue to benefit from rising passenger numbers. Current economic uncertainty and the high price of aviation fuel feeding through into higher ticket prices/surcharges, suggests that travellers will be watching the pennies on their trips abroad and hence may decide to skip buying things at airports.

Increased security in the wake of 9/11 has led to the need for passengers to spend more time at airports. The airport environment is a vacuum of boredom, where we are vulnerable to spending in a bid to kill time in the absence of other options or distractions. However, the basic retail principle remains that if there is little worth buying then little will be bought.

A great deal of airport development is underway across Europe in order to accommodate continually rising air passenger numbers. Development of new terminal facilities is enabling airport operators to offer more retail/catering facilities. Consumers at airports are looking for something different and special at airports and the coming years will reveal whether airport operators are able to respond to this demand with innovative retail concepts that inform and entertain as well as sell merchandise.

Key themes of the report:

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The value of airport retail sales across Europe is growing faster than all retail sales in the continent. However, much of the rapid growth of airport retail sales has come from new retail space opening at previously under-provided European airports. This is the opposite to the UK where most airports offer little that is not available on every high street. Hence airport sales are growing more slowly than the spending of both inbound and outbound air travellers – it is in effect losing share. Airside retail offers need to become more sophisticated with wider product ranges, better merchandising and improved service levels to actively sell products.
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Consumers are tending to be older, wiser and more affluent. They are flying more helped by the growth of low-cost airlines and hence are spending more time in airports. This should make airports one of the most exciting areas in European retail.
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This report looks at the drivers of airport retail – trends in passenger number growth and their spending, the duty-free market, airport operators and retailers and their plans for the future.

Contents

Issues in the Market
Key themes and issues
Definition
Financial definitions
Currencies
Abbreviations
Insights
Airport agents
The kids are all flight
How green is your airport?
Market in Brief
Air travel soars upwards
Airports – a strong retail market
Economic clouds in the short term
Airports – new retail floorspace on the horizon
A changing competitive landscape
The power of airport operators
What does the future hold?
Internal Market Environment
Key points
Europe takes wing
Figure 1: European air traffic, 1990-2010 (f)
Low-cost carriers (LCCs)
Figure 2: Low-cost carrier flights, H1 2006 and H1 2007
Figure 3: Top 25 low-cost carrier airports, July 2007
European airports
Figure 4: Top 30 European airports by passenger volume, 2004 and 2007
Figure 5: Top 30 European airports, passenger volume growth, 2004-07
Figure 6: Major airports for travel beyond the EU, 2005
Will Europe have enough airport capacity?
Opening up the Skies
A new generation of aircraft
Where in the world?
Figure 7: Destinations of extra EU 25 passenger air transport, 2005
European Airport Retail Market
Key points
Market size
Figure 8: European airport retail sales at current prices, 2003-07
Relative growth
Figure 9: European airport retail sales compared to all retail sales, 2003-07
Segment performance
Duty-free
Figure 10: Europe duty-free market by segment, 2002-06
Figure 11: European duty-free market segments, 2002-06
Figure 12: Growth in European duty-free market segments, 2002-06
Forecasts
Duty-free
Figure 13: Global airport duty-free market, 2002-12
Broader Market Environment
Key points
Four years of solid economic growth
Figure 14: European GDP and per capita GDP, 2003-09
Figure 15: European household expenditure and household expenditure per capita, 2003-09
Retail sales have been on the up
Figure 16: European retail sales and retail sales per capita, 2003-07
But confidence is now waning
Figure 17: EU 27 economic sentiment index, May 2007-April 2008
Europe is greying
Figure 18: Trends in the age structure of the EU 27 population, 2000-07
Who's Innovating?
Key points
The terminal wow! factor
Showcasing products
And now for something completely different…
…and not just shops
Leading Airport Operators
Key points
Figure 19: Leading European airport operators, total turnover, 2007
Figure 20: Leading European airport operators’ commercial sales, 2007
Figure 21: Leading European airport operators’ retail & catering sales, 2007
Aeroporti di Roma
Strategic evaluation
Background
Financial performance
Figure 22: Aeroporti di Roma, financial performance, 2003-07
Retail facilities
Aéroports de Paris
Strategic evaluation
Background
Financial performance
Figure 23: Aéroports de Paris, financial performance, 2004-07
Figure 24: Aéroports de Paris, retail & catering revenues, 2005-07
ADP Retail
Figure 25: Aéroports de Paris, growth of retail and catering floorspace, 2006-10
Aena
Strategic evaluation
Background
Financial performance
Figure 26: Aena: Financial performance, 2002-06
Retail and catering revenue
Figure 27: Aena: Retail and catering revenue, 2006
Retail facilities
BAA
Strategic evaluation
Background
Financial performance
Figure 28: BAA: Continuing operations financial performance, 2006-07
Retail revenue by airport
Figure 29: BAA: Retail revenue by airport, 2007
Figure 30: BAA: Retail revenue by airport, 2007
Commercial and retail revenue by store type
Figure 31: BAA: UK commercial revenue breakdown, by type, 2004/05-2007
Retail facilities
Figure 32: BAA: UK airport retail space, March 2005 and March 2008
Retail strategy
Dublin Airport Authority Plc
Strategic evaluation
Background
Financial performance
Figure 33: Dublin airport authority, financial performance, 2003-07
Figure 34: Dublin airport authority, domestic turnover breakdown by activity, 2003-07
Retail facilities
Figure 35: DAA, shops and catering outlets by airport, June 2008
Fraport Group
Strategic evaluation
Background
Financial performance
Figure 36: Fraport Group, financial performance, 2003-07
Retail facilities
Figure 37: Fraport Group, shopping space development, terminals 1 and 2, 2005-11
Figure 38: Frankfurt-hahn & Hanover airports, retail outlets, 2008
Macquarie Airports (MAp)
Figure 39: Macquarie Airports, airport shareholdings as at June 2008
Strategic evaluation
Background
Financial performance
Figure 40: MAp: European airports performance summary, 2007
Brussels airport
Figure 41: Brussels Airport, performance statistics, 2003-07
Copenhagen airport
Figure 42: Copenhagen Airport, performance statistics, 2003-07
Bristol airport
Figure 43: Bristol Airport, performance statistics, 2003-07
Manchester Airport Group
Strategic evaluation
Background
Financial performance
Figure 44: Manchester Airport Group, financial performance, 2002/03-2006/07
Relative airport size
Figure 45: Manchester Airport Group, share of passengers by airport, 2006/07
Retail facilities
Figure 46: Manchester Airport Group, shops and catering outlets by airport, April 2008
Schiphol Group
Strategic evaluation
Background
Financial performance
Figure 47: Schiphol Group, financial performance, 2003-07
Figure 48: Schiphol Group, revenue breakdown by activity, 2007
Consumers
Figure 49: Schiphol Group, consumers division breakdown of revenue, 2006-07
Figure 50: Schiphol, Concession income per international departing passenger, 2003-07
Retail facilities
Flughafen München GmbH (FMG)
LFV Group (Sweden)
Oslo Lufthaven AS (OSL)
SEA Milan Airports
Figure 51: SEA Milan Airports, shops and catering outlets, June 2008
Unique (Zurich Airport)
Vienna International Airport
Leading Airport Retailers
Key points
Figure 52: Leading European airport retail specialists’ total sales, 2007
Figure 53: Leading European airport retail specialists’ European sales, 2007
Figure 54: Leading European airport retail specialists’ European versus ROW sales, 2007
Autogrill (Aldeasa/Alpha Airports Group/World Duty Free)
Strategic evaluation
Background
Financial performance
Figure 55: Autogrill airport retail: Components’ financial performance, 2005/06-2006/07
Store portfolio
Alpha retail
World duty free
Aldeasa
Aelia (Lagardère Services)
Strategic evaluation
Background
Financial performance
Figure 56: Aelia: Sales by activity, 2007
Store portfolio
Figure 57: Aelia: European airport locations, 2008
Products
Figure 58: Aelia: Sales by activity, 2004 and 2007
Belgian Sky Shops
Strategic evaluation
Background
Financial performance
Store portfolio
Dufry
Strategic evaluation
Background
Financial performance
Figure 59: Dufry: Financial data, 2003-07
Figure 60: Dufry: Sales by region, 2007
Figure 61: Dufry: Sales by product category, 2007
Store portfolio
Figure 62: Dufry: Worldwide distribution of stores, June 2008
Figure 63: Dufry: European airport locations, 2008
Gebr. Heinemann
Strategic evaluation
Background
Financial performance
Store portfolio
Figure 64: Gebr. Heinemann: European airport locations, 2008
Kappé International
Strategic evaluation
Background
Financial performance
Figure 65: Kappé International: Financial performance, 2003-06
Store portfolio
The Nuance Group
Strategic evaluation
Background
Financial performance
Figure 66: The Nuance Group: Financial performance, 2003-07
Store portfolio
Figure 67: Nuance Group: European airport stores, 2008
Figure 68: Nuance Group: Sales by product category, 2007