Global retail recovery flies high at airports

Research* by the independent retail analyst has revealed that after an unprecedented slump of 5.1% in 2009 caused by the global financial crisis, 2010 marked the beginning of a new era as airport retailers achieved growth of 8.4%.

The robust growth has been driven in Asia Pacific and the Middle East & Africa. Neither region was as badly affected by the down turn as mature markets, such as Europe. In fact Asia Pacific is set to overtake Europe to become the world's leading airport market in 2015, with sales set to nearly double from $7.8bn to $15.2bn (about R57 billion to about R111.3 billion).

Anne Marie Davis, analyst at Verdict said: "Low-cost airlines such as Malaysia's Air Asia and India's Spice Jet and IndiGo have made air travel more affordable to the expanding young urban population in the Asia Pacific region. This, combined with ambitious investment in new infrastructure, has helped increase footfall in the region and therefore boost retail sales."

Beauty set to grow

Within retail, it is beauty sales which will be the fastest growing category and this growth will be driven by strong demand in Asia. Over the next five years this sector of airport retail is predicted to grow by more than 80%, while growth in alcohol and tobacco is set to slow.

Davis continued: "Beauty is one of the key drivers of growth for airport retailers but fashion and electronics are also areas which show huge potential over the next five years. To take full advantage of this potential, airport retailers will need to rely less on passing footfall. Instead they should engage with consumers more and invest in new channels such as home delivery and Collect on Return services. Therefore if retailers can encourage consumers to spend more, they can ensure that when growth rates tail off after the emerging markets begin to mature in 2012, margins are better protected."

Related research: *Global airport retailing

©Verdict Research 2011