AUSTRALIA. Sydney Airport Corporation Ltd (SACL) has issued a Request for Proposals for a jewellery concession at the International Terminal (T1).
Closing date for proposals is 7 October 2005. SACL described the RFP as a “positively sparkling opportunity”.
The RFP is for the non-exclusive right to operate, develop, market and manage jewellery store(s) in six different locations spread across the departures hall, and the departures concourses in Pier B and Pier C. Offers for one or more stores may be submitted.
Proponents may wish to consider putting forward an offer on stores in Pier B and Pier C in order to “cover the market and gain exposure to 100% of departing passengers”, SACL said.
The RFP is an interesting one, touching on many of the key notes contained in the “˜Trinity Forum’ debate of the past few years, including airport/retailer relationships, alternative and creative proposals, the essential role of customer service and the critical nature of the value/pricing offer. We think, as such, it bears reproducing in substantive form here.
Here are key elements of the tender:
Purpose and scope
SACL said the purpose of the RFP is to select the proponent/s most capable of working with the airport company “to deliver a high standard of customer service, competitive prices, and the latest jewellery concepts through the use of a proactive marketing approach to maximise sales during the term of the sub-lease in order to deliver maximum value to our customers, the successful Proponent, and SACL.”
Alternative proposals to the standard offer
Alternative proposals are optional, SACL said, and “are an opportunity for a proponent to suggest a creative approach or business structure that it would like to propose for SACL’s consideration.” It must be accompanied by a standard proposal and the must be no less favourable to the airport company than the standard proposal.
Current level of business
Based on the information provided by the current tenant, a break-up of gross sales by month for financial year 05, annual sales for the last five years, and a break-up of sales by category are available in the Information Pack that will be made available to proponents upon signing of a confidentiality agreement.
Development strategy and the Retail Spatial Plan
SACL is currently progressing a development strategy for T1 that will address all elements of the terminal’s operational, facilitation and commercial requirements consistent with forecast passenger demand in the Sydney Airport Master Plan.
An important element of the Strategy will be the Retail Spatial Plan. SACL said that it is imperative that the overall development achieve a harmonised retail and operational environment that provides maximum passenger exposure to the retail offer without compromising operational fundamentals.
The Retail Spatial Plan will complement the changing terminal building which is envisaged to include the introduction of a single centralised immigration and security zone for all outbound passengers, and a corresponding centralized airside retail precinct post immigration and security.
The Strategy is in the investigatory stages. Should it proceed, it is likely that it will commence within the term of the leases contemplated in the Request for Proposal. As such, the lease terms offered reflect the likely timeframe before the premises may be affected by the possible development.
On the basis the Strategy is approved, the current planning program estimates the centralisation to occur mid-2009, at which time passengers departing from Pier C will pass through this centralised retail precinct before reaching the retail stores in Pier C.
Where an “˜Additional Term’ is detailed, SACL will offer the successful proponent(s) a new lease(s) of alternate premises for a new five-year term from the availability of the alternate premises. At this time, the proponent(s) will be required to fit out the alternate premises at its/their cost.
Current operation
Currently the anchor duty free retailer [The Nuance Group] sells a range of jewellery, watches, and opals, and makes up a significant component of total jewellery sales within T1. Upon completion of the Retail Spatial Plan, the duty free operator will cease to sell jewellery, watches, and opals. At this time, SACL said it may seek to revise the mix of jewellery stores within the terminal.
Timetable
Request for Proposal issued: 1 September 2005
Closing Date for submissions: 7 October 2005
Evaluation Period: October/November 2005
Award of Lease: November 2005
Information Pack
The Information Pack will be made available to proponents upon request. It contains the following information:
• Information on Sydney Airport
• Historical Sales of the jewellery category
• Passenger movement information
• Passenger demographics
• Guide for operating within Sydney Airport
• Standard form of sub-lease
Working relationship
The RFP makes some interesting and timely observations about the relationship between retailer and airport. SACL said: “The management of the store is an ongoing commitment and one that requires a strong working relationship between SACL and the successful proponent. The needs of SACL and the successful proponent will require a dynamic and consultative practice to be put in place.
“It is proposed that there is a dynamic interaction to:
• discuss the business performance within the context of the prevailing operating environment and market conditions and to review business plans;
• monitor trends (including customers and merchandise) and to devise strategies for effective management of trends;
• review marketing and sales initiatives.
“The working relationships and practices that have been forged with our retail partners in the past have proven to be very positive,” said SACL. “SACL has a retail team dedicated to ensuring the retail facilities run smoothly and as an integrated component of the airport environment.”
Customer service
SACL said it shares an “overwhelming commitment” to customer service and its continued development. “SACL sees customer service as a strategic tool, not an expense. It is seen as a positive force for increasing sales
and for reducing the cost of sales.”
Pricing
SACL said it is committed to providing customers with fair prices for product and services at the airport. “As such, all prices should reflect a competitive pricing structure compared to the greater, off-airport domestic market.”
In addition, retailers are required to offer all product tax free to travellers. Landside retailers should offer product tax paid (to non-travellers) and tax free (to travellers) and are required to use an approved method for selling tax free such as the sealed bag system.
In the event the successful Proponent(s) has/have off-airport stores, the airport prices must be no higher than those prices, except in the areas post immigration, where prices should be less the GST.
Contacts
Proponents wishing to undertake an on-site inspection of the existing and proposed sites, should contact Mark Zaouk, Retail Coordinator Alan Baynash, Retail Manager. Telephone: + 62 (02) 9667 6152 Telephone: (02) 9667 6142
MORE STORIES ON SYDNEY AIRPORT
Nuance vows to defend key Sydney contract after airport announces 2006 RFP – 29/08/05
Airport to go to market for Australia’s largest duty free contract – 26/08/05
