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Optimism prevails in the face of inflight’s adversity
While the naysayers may choose to dwell on inflight retail’s recent sales decline, it is important to point out that the situation is gradually improving. Twelve months ago, TRBusiness reported on
what was an unflattering situation, with sales dropping by 11.5% to $2.6bn in 2015. However, the most recent preliminary figures from
Generation Research reveal that the decline in sales improved to -6.6% to total $2.5bn in 2016. TFWA recently shared some findings that showed that an
estimated 2% of international travellers make a purchase during their flight; the potential to develop the channel remains clear-cut. What is more interesting is that global airline ancillary revenues continue to grow exponentially, rising by 22% to total $82.2bn in 2017, according to estimates from IdeaWorks and CarTrawler. In the case of traditional airlines (non-low cost) based outside the US,
revenue from onboard services, including duty free, accounted for roughly 21% of ancillary revenues. While a large chunk of ancillaries are still gobbled up by customised passenger services, baggage fees, commissions and the sale of frequent flyer miles, duty free still appears to retain something of an untapped status. Sentiments such as this pervade this month’s issue, with key
stakeholders such as Heinemann, Gateretail, Scorpio and Hanse Distribution illustrating how suppliers and concessionaires alike can harness best-value when it comes to retailing onboard [turn to pages 23-34 for a fuller picture of the key issues].
Support from different quarters Elsewhere, TRBusiness’ annual tobacco report draws views from across the board to understand how the industry is reacting in an enduring climate of regulatory constraints and punishing laws. Resilience and ingenuity resonate as particular themes, which will continue to be required as duty free musters support against another World Health Organization challenge via the Illicit Trade Protocol [turn to page 48 for the background on this pressing issue]. On an entirely separate note, I am delighted to announce the latest
member to join our editorial ranks this month. Experienced travel retail journalist Andrew Pentol – a familiar face on the travel retail circuit – takes up the Senior Editor position, strengthening TRBusiness’ pool of growing talent. Pentol, who brings 10 years’ experience from DFNI to his new position, joins a new-look team comprising Charlotte Turner (maternity) and I. In fairness to those who may have missed the announcement on
TRBusiness.com earlier this month, we are happy to repeat comments made by the new joiner here: “I am proud and excited to be joining TRBusiness, a publication I have admired and respected from a far during my time commentating on this wonderful and unique industry. The opportunity to add my experience, knowledge and enthusiasm at an exciting time for the company, with the launch of the industry’s first consumer awards in Singapore, is something I am relishing.”
Acting Managing Editor FEBRUARY 2018 TRBUSINESS 13 Luke Barras-Hill,
An artist's rendering of the new liquor offer to be built at HKIA by CDFG and Lagardere Travel Retail.
The Lagardère Group has reported robust revenue growth of 4% (like-for-like) in 2017 to €7,069m ($8.7bn) driven mainly by the strong organic performance of Lagardère Travel Retail. Group revenue, however, was down 4.4% on a consolidated basis. The difference between like-for-like and consolidated figures
is essentially related to a negative scope effect resulting from the divestment of Press Distribution operations by Lagardère Travel Retail. In Q4 2017, the Group ended the year with continued like-for-
like growth momentum, once again mainly due to the success of Lagardère Travel Retail. Revenue for the Group amounted to €1,911m ($2.3bn) up 3.3%
like-for-like and 3.7% on a consolidated basis. During the same period, Lagardère Travel Retail business growth
accelerated 10.3%. This was led by a favourable network impact, strong sales momentum and rise in passenger traffic, especially in the Asia Pacific and Europe Middle East and Africa regions. For 2017 as a whole, total Lagardère Travel Retail revenue
was €3,412m ($4.2bn) up 9.1% like-for-like and down 7.7% on a consolidated basis. The difference essentially reflects a €9m ($11m) negative foreign exchange effect and especially a €556m ($680.5m) negative scope effect. In Q4, revenue for the division reached €866 million ($1bn) up
10.3% like-for-like and down 4.9% on a consolidated basis. In France, the business registered 7.3% growth, led by the network expansion in foodservice activities, success of the new Relay store concept and “good” performance of the duty free segment mainly due to the modernisation of the Nice airport stores. he Europe Middle East and Africa region (excluding France)
posted a strong 17.2% increase. North American revenue dropped 3.6%. Asia Pacific delivered strong revenue growth of 22.7% with strong momentum in Asia (up 52.7%).
LEADER/NEWS
Strong travel retail performance energises Lagardère in 2017
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