Retail Stores at Airport make $1 Billion Revenue

Retail Stores at Airport make $1 Billion Revenue

By SiliconIndia   |   Tuesday, 31 January 2012, 11:56 Hrs   |    1 Comments
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Retail Stores at Airport make $1 Billion Revenue
Bangalore: A robust growth has been registered in airport retail market in India, as the revenue topped $1 billion during 2011. The rise in revenue is due to growth in passenger traffic and people shopping at the airport. According to Bangalore-based consulting firm Asipac Projects, the business is growing at 17-18 percent annually, emerging as a feasible platform for retailers and operators of the new airports.

The top categories emerging in the duty free section are beauty, alcohol, personal care tobacco, whereas, food and beverages, stationary, books are spotted in the duty-paid segment. The airports registered approximately $43 billion in sales globally with London Heathrow and Seoul's Incheon being the most profitable ones.

Dipak Agarwal, Chief Executive, DLF Retail, which runs retail stores like Mango and Boggi Milano at Delhi's IGI Airport, said, "Airport stores are twice as productive for us compared to stores outside, in terms of sales per sq ft, though operational costs go up substantially at airports . Internationally, sales per sq ft are four to five times more compared to street stores at some of the busiest airports. We have a long way to go to go to reach those numbers."

The domestic as well international airport at Delhi terminal (T3) has the retail area of around 2 lakh sq ft and built to tap the potential of retail revenues. Airport operators like GMR and GVK that started with very high rental rates are now moving towards a revenue-share model. Malls still work on a persq-ft rental model, with few as exceptions.

Anuj Puri, Chairman and Country Head, JLL India, a Real-Estate Consultancy , said, "Rentals were too high in the beginning. Therefore, the revenue-share model works better. It is like a win-win situation for both parties." Shashi Kapoor of Parcos, who deals with fragrances, cosmetics and skincare, said, "We have been drawing three to four times more sales from our four stores in Mumbai and Delhi airports compared to outside stores. In fact, we are doing better in Mumbai."

Amit Bagaria, Chairman & CEO of Asipac Projects, said, "Flyers hang around more at an airport like Bangalore as it is far away from the city. Also, shopping at airports in India has anovelty attached to it, considering it is a new concept for us."

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Reader's comments(1)
1: I wonder how much of the revenue is from credit card fraud committed on unsuspecting travellers. I landed at IGI on Feb 6th from the US on a 4 week visit. I made a purchase at the IGI duty free shop using my credit card. On Jan 26, I received an email from my credit card company to contact hem regarding a suspicious purchase. When I called them I was told there was a charge of $77.00 for a perfume purchase against my card. Someone had obviously appropriated and used my card number at IGI since my purchase on Jan 6 was the only time I had used that card since arriving in Delhi. Thankfully my credit card company had found the charge suspicious and alerted me. Needless to say I for one am no longer impressed with the IGI duty free shop and will never shop there again. I am also alerting all my friends and relatives to avoid shopping there. Ironical and sad to say, the fraud happened on Jan 26 when the country was celebrating it's 63rd independence day from another oppression!I hold people like Dipak Agarwal,Anuj Puri, Amit Bagaria responsible since such cheating behaviour is set at the top.
Posted by:Manu Anand - 01 Feb, 2012
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