ASUTIL 2017 With the exception of Fraport at


Porto Alegre (25 years), the duration of the concessions are for 30 years. Chinese conglomerate HNA Group, which has collected recent stakes in Dufry and Richemont, has also agreed to buy Odebrecht’s stake at Rio Galeão, providing a further, and intriguing, twist. Dufry Brasil has also continued


to consolidate its foothold in the market. Today it operates 99 stores – up from 60 in 2013 – and has grown its store footprint by an impressive 138% to 38,000 sq m since the conclusion of the World Cup and Olympic Games. “Our average contract length


is 12.6 years nowadays, so our commitment to Brazil is a full one,” Fagundes confirmed.


Belo Horizonte uplift He earmarked Dufry Brasil’s new arrivals walkthrough concept at Belo Horizonte as an example of increased commercial improvement. Between January and April this


year, the store posted an uplift of +52% in SPH, while new departure duty free concepts at Rio Galeão T2 and São Paulo-Guarulhos’s (GRU) T3 have delivered an increase in ticket sales of +26% and +34%, respectively, during the same period. Meanwhile, the duty paid business


continues to flourish. At GRU, the introduction of a new megastore concept grew spend per pax by a whopping +104% in the first three months of this year. In addition, the Dufry-owned


Hudson business also accounted for 40% of duty paid spend per pax between January to April this year. In a refreshing admission, Dufry


Global COO José Antonio Gea made clear that while the globe’s leading travel retailer seeks to continue creating value through market consolidation, there remains a problem with price perception in duty free. Referencing a Dufry study, Gea


said there is ample opportunity to increase the 16% of those buying in duty free by targeting the 47% of those who browse. However, currently the travel retail


offering is not attractive enough to this segment of browsers, he said.


JULY 2017


“If we don’t change the principle of this business, we will not continue increasing the minimum annual guarantee,” he said. Peter Mohn, CEO, m1nd-set, consequently revealed to delegates the company’s findings from a comprehensive overview of duty free price perception across five markets: Peru, Brazil, Uruguay, Argentina and Chile. Highlights from a study of 1,000


people (including travellers, shoppers and buyers from the five markets taking trips in the past three months) showed Brazilians ranked highest (28%) when considering price as a factor for not visiting an airport shop. This compared to Chileans


who topped the list (17%) when considering price as an advantage for entering a store, while Peruvians (52%) rated the highest among regions’


satisfaction


with value for money in duty free. When it came to price comparisons


between airport and domestic shops, Uruguayan customers expected a minimum difference of 20%


“The game is not just about hard currency; we have to make sure we understand when we translate to local currency, we are generating enough margin to overcome the fixed costs usually based on local currency.”


Gustavo Fagundes, President, ASUTIL and COO, Dufry Brasil & Bolivia


between the airport and domestic channels. Summarising, Mohn said


today’s consumers are looking for value, convenience and unique experiences, and retailers would be ‘punished’ by failing to respond to the trend. Higher prices at duty free


compared to downtown is also ‘risky’, leading to a fall in footfall and conversion rates. «


For further coverage from the conference, visit www.trbusiness.com


Dufry raises Tom Jobin footprint


Dufry now operates close to 10,000sq m of retail space at Rio de Janeiro-Galeão Tom Jobin International Airport, having doubled its existing duty free footprint to 8,000 sq m. This includes 2,200sq m in the main departure area and approximately 4,000sq m in arrivals.


Andre Baldi, Operation Director, Dufry tells TRBusiness of the retail ‘revolution’ taking place as a result of Dufry’s enhanced retail space, confirming travellers’ positive responses to the new stores and operations. Argentinian passengers account for a sizeable share of sales in departures, with categories growing more than +20% in Q1, he stated. Electronics is a standout


performer, and Dufry claims to be the first travel retailer worldwide to have an Apple shop-in-shop airport concept, which commands a strong following among Brazilian and Argentinian passengers. Framing the introduction


of new luxury and destination areas is a R$2bn (US$600m) investment into Tom Jobin’s terminal facilities. Beginning in 2014, the transformation has raised capacity to 37m pax per year and expanded commercial facilities


to more than 24,000sq m, including over 150 shopping and F&B areas. The resulting


refurbishment of the new stores, coupled with a more favourable exchange rate, has generated an increase in spend per head of around +25% year-on- year in Q1, according to Gabriel França, Corporate & Commercial Director, at Rio Airport. “Duty free is an extremely


dynamic business. We are working hard to have the right mix of brands...”


TRBUSINESS 27


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