Published
Jun 26, 2017
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Airport duty free stores are bright spot in weak retail scene says GlobalData

Published
Jun 26, 2017

Travel retail, especially retail in airports, is a huge opportunity and “a bright spot in the retail world,” according to research firm GlobalData’s latest report, Global Airport Retailing 2016-2021.


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And while enhanced security in recent years has created major inconvenience for travellers, it is also delivering a captive audience” for both multibrand and monobrand retailers with airport stores, the company said.

GlobalData said spending in airports hit $38bn globally in 2016 and is set to grow by 27% to $49bn by 2021.

Maureen Hinton, Group Research Director at the firm, said: “Apart from the growing number of air travellers, increased security over recent years delivers a constantly changing captive audience for airside retailers, which claim 83% of all spending in airports. This audience has time to kill and, especially when on holiday, is in the mood to spend.”  

This has led to fast development and expansion of retail space at airports as what GlobalData calls “grateful retailers,” who may be seeing their customers forsaking high street stores for e-shopping and leisure experiences, “welcome the opportunity to get in front of willing customers again.”

While the traditional ‘duty free’ categories of alcohol and tobacco will take a large chunk of the spending that is the result of this, categories such as beauty and fashion accessories are also huge beneficiaries. And a wider selection of fashion product is now taking advantage of the spending upswing with Jack Wills, for instance, being only the latest retailer to announce a major travel retail store opening.

Hinton added: “Airports appreciate the extra revenue and are willing to invest in creating a more inviting space for travellers. For example, in Singapore’s Changi airport you can catch a movie, browse new art, play games, pamper yourself in a spa and entertain your kids – the airport equivalent of a modern shopping centre.”

Changi is actually a good example as Asia Pacific airports saw the most spending in 2016, taking $14.8bn through their tills. That’s no suprprise as Chinese travellers were a particular boon to this market, enthusiastically buying duty free luxury goods.

Europe, meanwhile, ranked second on spending, hitting $10.7bn in 2016. One well-publicised benefit of the UK’s Brexit vote was the increase in luxury tourists to the country, who were attracted by the low value of the pound.

Even the US, which GlobalData said has traditionally offered a poor shopping experience at airports, has been cashing in and developing new retail spaces and offers. However, that country has major challenges too as the increased airport store investment and innovation has coincided with President Trump’s attempts to curb immigration, which is making regular travellers think twice about visiting the country.

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