LEADING ASIA PACIFIC OPERATORS: ADELAIDE AIRPORT Adelaide Airport retail transformation gathers pace
Having awarded a nine-year duty free concession to incumbent operator Lagardère Travel Retail, both airport and retailer can now look forward to taking their partnership to the next level, as Andrew Pentol reports.
L
ast June, Adelaide Airport revealed it was about to begin a $165m upgrade, which would
ultimately create a larger duty free zone for both international arrivals and departures. Passengers can look forward to
a wider range of retail and dining options once the refurbishment of the retail area is complete (expected by 2021), resulting in an 80% increase of space across the airport’s domestic and international retail and dining precinct. Currently nine months into the
project, everything appears to be progressing well so far. John Pearce, Head of Retail and
Commercial — Terminal, Adelaide Airport, tells TRBusiness: “The first handover stage to the new retailers is planned for December this year. Six new stores will be handed over for opening to trade in the domestic area in January 2020.” He adds: “The terminal expansion
is international, but these domestic retailers are all exposed to international departing passengers. These passengers make tax-paid purchases (fashion and food and beverage) on their way to international processing.”
International pax growth Over the years, Adelaide Airport has certainly increased its international passenger footprint. When the new domestic and international terminal opened in 2005, there were only 200,000 international passengers. This number could rise to 1.2m, once the project is complete. The focal point of the improved
international retail and boarding facilities will be Gate 18. This can be expanded to include gates 19 and 20 and even gate 16 as well. Pearce explains: “Effectively, what
this expansion is doing is creating a dedicated international area. We are expanding the bag belt in arrivals etc, but also significantly expanding the
MAY 2019
duty free operations.” In March this year, around six
months after the duty free RFP had been released,
incumbent retailer
Lagardère Travel Retail was awarded a new nine-year contract, beginning 1 August 2019.
Well-fought tender Spanning 1,700sq m of retail space in the international terminal, the agreement includes the opening of Aelia Duty Free stores in arrivals and departures as well as international food & beverage concessions. Lagardère, which was also awarded
a domestic retail concession, says it will showcase the best of the South Australian region and best national and international global brands. The awarding of
the contract
marked the end of a competitive tender which featured three finalists. These were Lagardère Travel Retail, Heinemann Australia and Lotte/JR Duty Free. Pearce recalls: “It was very much
a level playing field and we had three strong finalists. Their offers were evaluated against our assessment criteria. This was 50% financial, 30% retail concept (brand delivery and fit-out etc) and 20% corporate alignment and legal governance.” As well as offering a great retail
concept, the winning bidder needed to convince
the airport it could execute through a construction TRBUSINESS 71
phase. The airport also had to consider if there would be a ‘like mindedness collaboration of culture’ and alignment in terms of understanding. Lagardère, which has been a
partner of the airport since 1997, was certainly not complacent, according to Pearce: “They submitted a very strong bid and did not take it for granted that they would automatically be re-awarded the contract. “The retailer excelled right
across the board, particularly when demonstrating its understanding of the Australian market and ability to create a sense of place.” Choosing a partner with a
‘willingness and appetite’ to join the airport on its digital journey was also a priority. “We know what the future holds in principal, but we are only at a rudimentary stage in terms of executing exactly what we want. “Our aim was to partner with
a company which was willing to share data and grow with us on that journey.”«
“[Lagardère] submitted a very strong bid and did not take it for granted that they would automatically be re-awarded the contract.”
John Pearce, Head of Retail and Commercial — Terminal, Adelaide Airport
Above: The new nine- year agreement includes the opening of Aelia Duty Free stores in arrivals and departures.
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