TOP 10 OPERATORS 2019: RANKING AND ANALYSIS


at Singapore Changi Airport. At press time, Heinemann and


Korean rivals Lotte and Shilla had lodged bids to contest the re- tendered liquor and tobacco contract at Singapore Changi Airport due to be vacated by long-time incumbent DFS Group. Launched in June, the 18-store six-


year concession covers 8,000sq m of retail space across all four terminals. Having originally been expected to participate in a new tender, in the hope perhaps of securing more favourable terms, DFS (No 7 in our table) will now no longer operate at another key Asian hub (it exited its L&T contract and lost out to Shilla for P&C at HKIA two years ago). DFS had initially agreed a two-year


contract extension in December, which was due to begin in April 2020. However, it has instead opted to extend its current tenancy by two months until June 2020. It is important to note that DFS’


luxury concessions at Singapore Changi, as well as its T Galleria by DFS and Singapore Cruise Center businesses are unaffected by its decision to withdraw from the L&T concession. A statement from Ed Brennan, DFS


Group Chairman and Chief Executive Officer seen by TRBusiness said the decision not to bid was based on the retailer’s ‘unique understanding’ of the business environment as the current concessionaire.


CDFG’s $5.2bn in sales set in motion its metamorphic rise to fourth place.


As has unfortunately been made clear in the last couple of years – with both Lotte and DFS withdrawing anchor contracts at key Asian hubs – winning the tender is just the beginning and only time will tell if an operator can stay the course... TRBusiness


He said: “Specifically, changing regulations concerning the sale of liquor and tobacco, against a global context of geopolitical uncertainty, meant that staying in Changi was not a financially viable option.” [See p53 for the full DFS Group report]. While the Changi L&T tender continues to set tongues wagging, it


Report methodology and important considerations


Sales totals are informed almost entirely on one- to-one interviews with top management at every one of the ranked companies, plus officially-released data for 2017. TRBusiness acknowledges that some operators include foodservice revenue or special retail concepts, while others do not. Some also include 100% of their joint ventures, but not all, so like-for-like comparisons are


difficult to make. In other instances, retailers


also have duty paid operations, while others have bigger or smaller duty free businesses, making even these comparisons problematic here (or in any other survey). Certain operators such as


DFS, Lotte, Shilla, Dufry and others have traditionally had greater exposure to more higher spending passengers,


arrivals shops, downtown outlets and higher allowances in some locations than others, so this can also distort comparisons. But the biggest distortions are


inevitably caused by sales made in local currency units, but then subsequently expressed in US dollars, such as Euros, HK dollars, Chinese Yuan, Swiss francs, Korean won, Japanese yen etc.


is just one of many mega tenders that were released this year. Many had their eyes trained on


the Shanghai Pudong duty paid and duty free contracts, in addition to those issued by Airports of Thailand (AOT), Macau International Airport, San Francisco International, Incheon arrivals and of course, Beijing Daxing Airport. While many of these contracts


have already been awarded, we have yet to see how the victorious will be able to make the most of their exciting new opportunities. As has unfortunately been made


abundantly clear in the last couple of years – with both Lotte and DFS withdrawing anchor contracts at key Asian hubs – winning the tender is just the beginning and only time will tell if an operator can make a solid business case for staying the course... «


Above, top to bottom: Max Heinemann, CEO, Gebr. Heinemann; Ed Brennan, Chairman and CEO, DFS Group; Susan Whelan, Senior EVP, King Power International Group; Leon Falic, President, DFA; Anthony Kenny, CCO and Deputy CEO, ARI.


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