Airport supermarkets are starting to take off, providing airports with significant revenues and
profits, and retailers with a captive audience.
Elsevier Food International, Vol. 11, Number 1, February 2008
Len Lewis

Airport retailing, a conglomeration of expensive duty-free shops, high-priced fast food and cheap souvenirs, is changing as rapidly as arrival and departure times, with supermarkets and convenience stores becoming an increasingly important part of the tenant mix.
Airports cannot afford the image of being dull, inconvenient stopovers with minimal services  for people who are just passing through. Across the globe, they are becoming airport cities  sophisticated, revenue-generating environments with all the comforts of home and office,  including everything you can find in urban areas or suburban shopping centres. They are  being reshaped into exciting, generating business, entertainment and retail hubs with a  return on investment that cannot be ignored.
At the same time, airports have become a profitable growth market for retailers who are  looking for alternative locations with a captive customer base. In fact, Mintel International, a  market research group has estimated that retail sales at airports in western Europe alone came  to Û5.3 billion in 2002, the latest available figure.

 Replacing airline meals

Shopping in Schiphol Airport's tax free zone

Food retailing’s success is based on two major factors. Firstly, financially strapped airlines are curtailing free food and asking passengers to pay high prices  for mediocre meals and packaged
snacks. Many flyers now prefer to purchase food before  boarding, boosting sales at both convenience stores and supermarkets. Secondly, airport  employees, a virtually untapped customer base, like the convenience of doing their shopping on site at the end of their shift.
Supermarkets are not widespread at this point. But there are some notable examples. Schiphol  Airport in Amsterdam has casinos, a hotel and even a branch of the Rijksmuseum with a  permanent display of paintings by Dutch masters. In addition to 17 other food outlets,  Schiphol Plaza has a Food Village supermarket that is open every day until midnight. Food Village also has a store at London’s Heathrow. Munich Airport contains two moderately sized  but well stocked Edeka supermarkets and Singapore’s Changi airport has minisupermarkets in each of its two terminals. Billa, owned by Germany-based Rewe, and one of the leading chains in Austria, has been operating full-line supermarkets in railway stations for a number of years. It has opened a store at the Vienna airport, which is open until 10:00 p.m. daily. Meanwhile, Billa has other airportinterests, having launched a new airline-LTU Billa, in conjunction with German airline LTU. China’s Guangzhou Baiyn International Airport also has a supermarket and other units may be opening in an attempt to hold down food prices. Management believes that since the airport has to pay less for essential resources  such as water and electricity, this should be reflected in the prices of the food sold at the facility. People were complaining for example, that the price of a bowl of noodles at the airport cost 48 Yuan, which is nearly US$6.
Meanwhile, convenience stores are also expanding. Last year, Dallas Fort Worth International Airport debuted the first convenience store at a US airport with the opening of a 1,700-square foot TravelMart. It will cater to the 57 million passengers that use DFW annually, along with airline crews and airport employees. “We pride ourselves on being a smart business by bringing customers better choices to improve their entire airport experience,” said Jeff Fegan, CEO of DFW airport. “We will continue to look at new concepts that make the entire trip easier.”

Copenhagen concept
Last March, 7Eleven opened its largest European store at Copenhagen International Airport. The
2,200square-foot store has a broad assortment of meals, drinks, groceries and over-the-counter drugs and represents the first of a new  generation of 7-Eleven stores in Denmark with a wide range of fresh foods. The new format is more like a delicatessen or café than a traditional

Copenhagen International Airport offers one of the world's biggest food retailing activities

convenience store, according to the company. However, the store also offers returning travellers an opportunity to pick up groceries for at home at times when conventional stores are not open.
“The 7-Eleven is doing very, very well and it’s one of the biggest in Scandinavia,” said Henrik Busch, vice president of commercial affairs for Copenhagen International Airport. “It’s great for early and late incoming passengers who need bread, milk and other items. But we also have 22,000 employees and it’s a big service for them. And next to the store we have room for other convenience concepts like cafés, toiletry stores. We want to make sure passengers and employees have a full range of services,” he said.
Discussing international operations, Margaret Chabris, director of public

Cheese shop at Schiphol Airport.

relations for 7-Eleven in Dallas, Texas noted: “Most of the 7-Eleven stores open in other parts of the world are done so by international licensees, not 7-Eleven corporate. But we do have an international department that provides support and liaison for them. At present, the chain has airport stores in Vancouver and Edmonton, British Columbia, Oslo and Trondheim, Norway, Hong Kong, Singapore and in South China. Except for Vancouver, all licensees,” she said.
Edmonton is a full size store with a petrol station that is located at the entrance of the city’s
International Airport. “It’s been a very successful location for us because of the travellers who drop off their rental cars nearby and the drivers of the taxi fleets who stop off to fill up their gas  tanks.” Chabris concedes that the number of airport workers who shop the Edmonton has pleasantly surprised the company and Vancouver stores.
“Our prices seem to be better than many other retailers and variety is wider,” she said. “It’s not at all unusual to see international flight crews on their way home stopping off to pick up some essentials rather than making a stop at the supermarket.” With regard to further airport locations, she replied, “We’re certainly interested if the logistics and traffic warrant them. We’ve had tremendous success with Vancouver. So we would consider other airport sites.”

Tailored assortment
Of course, a lot has changed since 11 September, plus there are travellers who go directly to the gates. Therefore, expansion depends on where the store is located and who has access to it. As to product mix, “we tailor it to customers who frequent each store. So, you can find Slurpee, Big Bites and Big Gulps, but probably not motor oil at an airport store. It’s a matter of meeting the needs of customers. We have a lot of fresh food, because now you have to pay for any kind of decent food on board flights,” she said.
However, the convenience store does not have a lock on business at the Copenhagen airport. Next to a McDonald’s and a petrol station in the airport’s car park is a full-line Netto  supermarket. The store was opened three or four years ago and is the third largest in Denmark, according to Busch, noting that it is easily accessible to both travellers and airport personnel.
Although airport management is not actively looking, Busch feels there is room for another retail food store at the facility. “Lots of potential retailers are knocking at our door because they know it’s huge business. I don’t want to mention names but we’ve spoken with a lot of them,” he said, noting that existing stores have generated considerable revenue and profit for the airport, which takes a percentage of sales and typically signs a three- to five-year contract with retail tenants.
As to pricing, “The contract stipulates that prices must not be higher than stores downtown and we make sure by doing regular surveys on prices and service levels,” said Busch. To some extent, the airport also controls assortment. “We have good communication with our retailers about that. They are keen on doing a good job in the location. But space is limited and we have to make sure they have things that sell.”