NEWS ROUND-UP Speciality retail grows in stature at Sydney Airport
Sydney Airport has pinpointed speciality stores as a key driver of the +12.7% rise in retail revenue to A$331m ($247.5m) in 2017. Growth came from all elements of the
retail business at the airport, which handled 14.9m (+7.2%) international passengers in 2017, but pax growth linked to certain leases was also important. Speaking to TRBusiness during a wide
ranging interview, Sydney Airport General Manager Retail Glyn Williams said: “Last year’s retail revenue growth was not necessarily about duty free. Our reliance on duty free revenue has decreased because we have secured greater revenue out of other retail elements. “Going back a few years, duty free
comprised around 62% of all retail revenue in Sydney Airport. Now it is getting closer to 50%.” Overall 2017 retail performance was in
fact boosted by the International Terminal 1 luxury precinct’s first full year of operations. Tiffany, Burberry, Gucci, Rolex and Hermès
are among the 13 global designer brands represented there. “We had 13 stores there before and have 13
stores now. Turnover in that area is up +171% from where it was three years ago. This is the consequence of creating a product that resonates with passengers.” Despite such a significant turnover
increase, Sydney Airport is refusing to rest on its laurels as far as the luxury precinct is concerned. “We must consistently refresh and will do
that by swapping a few of the brands in the next couple of months,” said Williams. Reflecting on a positive start to 2018, he
continued: “This year we are tracking very nicely. We are 100% leased and if you look at the health of the business we have no rent outstanding with tenants.” Meanwhile, Sydney Airport is working
on a ‘whole series of opportunities’ including the redevelopment of Terminal 2 Pier B, where a further 14 retail outlets will be added.
Alcohol companies commit to new DFWC code of conduct
All members of the European Travel Retail Confederation (ETRC) active in the manufacturing or retailing of alcohol have now confirmed their commitment to the Duty Free World Council (DFWC) Self- Regulatory Code of Conduct for the sale of alcohol in duty free and travel retail. This follows the decision at the June 2017
AGM to replace the former ETRC Alcohol Code of Conduct with the DFWC Code, developed by DFWC in close cooperation
with its regional associations. In addition, ETRC is engaging with
its national and regional associations to ‘spread the spirit and values’ of the DFWC Code across Europe and to actively promote its adoption by their own members. “ETRC is confident its members will take a
proactive and responsible approach in their endeavours to comply with the provisions of the DFWC Code,” says the confederation. “The alcohol category is under increasing
scrutiny by regulators in Europe, with calls for textual and pictorial health warnings, structural separation in shops and restrictions on sales to name a few.” ETRC says the new code of conduct
has been designed to respond to those challenges and to complement any existing codes and guidelines being followed by individual alcohol manufacturing companies and other bodies.
Vietnam pushes Lotte Q1 earnings by 52% YOY
Lotte Duty Free has reported first quarter revenue of KRW1,262.9bn ($1,175.8bn) with a strong push from its overseas business in Vietnam. Revenue from its foreign arms soared by
52% year-on-year on the back of a surplus in Vietnam and Japan’s tax-exempt markets, the latter of which grew by 35%. In a results statement, Lotte reveals
operating profit of KRW24.9bn ($23m) based on K-IFRS consolidated statements (excluding the contribution from Busan and Gimhae airports). Total domestic sales lifted by 14%
year-on-year to reach KRW1,222.8bn ($1,129.1bn), while downtown duty free shop sales boosted by 19% as the seeming thaw in relations between China and South Korea mitigated the impact of THAAD. However, airports sales declined by
2% year-on-year. Operating profit from downtown operations posted KRW100.5bn ($92.8m) and KRW67.0bn ($61.9m) throughout its airports.
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