Major Transformation Of Airport Shopping

Major Transformation Of Airport Shopping

The duty free shopping experience at Auckland Airport is to undergo a major transformation. Auckland Airport has announced it has reached a decision on the successful tenderer for its duty free business.

“We are delighted to announce that DFS New Zealand Limited (DFS) has been awarded the licence to operate duty free stores at Auckland Airport for seven years from April 2008. This will bring significant enhancements to duty free shopping, that travellers will begin to see from next year,” says chief executive Don Huse.

“Both our organisations are focused on delivering a uniquely kiwi experience and value for money through special deals, promotional vouchers and rewards programmes. DFS will stock a much wider variety of goods than is currently available at the airport.”

A strong price comparison procedure across product ranges is at the core of the new licence. This will ensure duty free goods are sold on Auckland Airport at competitive prices.

“Independent research tells us that travellers compare on-airport duty free prices to local high street prices, online shopping, parallel import retailers and overseas retailers. A key factor in duty free shopping is price – that is why we, along with DFS, are so committed to price comparisons. This means travellers can be assured of getting great value for money here,” said Mr Huse.

“Travellers can still expect to be able to buy their favourite duty free products at prices that match or better Australian duty free airport prices for example.”

In May 2007 Auckland International Airport Limited (AIAL) called for tenders for the operation of duty free retail stores until June 2015. The participants were its existing duty free retailers, The Nuance Group (trading as Regency Duty Free) and the DFS Group.

DFS has enjoyed a strong 20-year partnership with Auckland Airport in serving international travellers through Auckland. Ed Brennan, chairman and CEO, DFS Group says DFS is very pleased to be awarded the expanded duty free concession at Auckland Airport.

“In addition to continuing to deliver the exceptional values that international travellers enjoy today, DFS will be investing over NZ$18 million to completely redevelop and expand the duty free shopping facilities at Auckland Airport. DFS will introduce a number of new retail concepts and a greatly expanded line-up of New Zealand and internationally-renowned brands. A world-class duty free shopping experience will be developed at Auckland Airport.

“DFS and Auckland Airport are uniquely positioned to develop this world-class retail experience and deliver exceptional value at extremely competitive prices compared with those of both New Zealand retail and duty free stores globally.

“DFS looks forward to growing the Auckland Airport duty free business and to exceeding Auckland customers’ expectations in every way,” said Mr Brennan.

Auckland Airport general manager retail, Nick Forbes says “This makes possible a major transformation in the duty free retail offer to travellers Through robust independent market research we are confident that the duty free developments coming up will mean travellers will enjoy a world-class shopping experience at Auckland Airport.”

The current duty free licences expire in August 2009. However, in conjunction with the existing duty free operators, AIAL decided to proceed with a tender now. This means the new duty free arrangements can be finalised before opening new duty free space as part of the $85 million international terminal expanded arrivals project.

This project is scheduled for completion in April 2008. It will double the arrivals duty free space from 800 m2 now to 1600 m2. This will significantly enhance the space and scope of the arrivals duty free offer. It will be the most extensive arrivals duty free in the Asia Pacific region.

The tender means there will be a phased approach from April 2008 to August 2009. During this time the airport will migrate from the two duty free operators, currently Regency Duty Free and DFS, to the single duty free operator model. Two duty free operators will continue to operate until August 2009.

From then, there will be a reduction in duplicated goods which will enable a considerable broadening of products and brands for sale in the much increased available space.

“Auckland Airport acknowledges with great appreciation the long standing 20-year partnership we have had with Regency Duty Free and their staff. We look forward to continuing to work positively with Kelvin Ricketts, managing director of Regency Duty Free in New Zealand and his team over the next two years,” said Mr Huse.

AIAL expects that the new duty free licence, combined with the recent foreign exchange and car rental concession tenders, will add approximately $7 million in minimum annual guaranteed retail revenue in the 2008 financial year and $10 million in the 2009 financial year.

This uplift in revenue reflects the significant enhancements to the retailing environment at Auckland Airport and the expected uplift in volumes from the broader product range and service offering.

Ends

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