TÜRKIYE. A pioneering force in the Turkish travel retail market since 1999, ATÜ Duty Free is marking its 25th year of operations by accelerating its expansion drive.
The company, a joint venture between TAV Airports and the Gebr Heinemann/Unifree Duty Free partnership, has broken new ground with recent investments and openings.
A highlight this year was the opening of a retail operation at the new Almaty International Airport terminal, the main gateway to Kazakhstan. At Istanbul Airport, where the company has a strong luxury presence, it partnered with Canada Goose for the lifestyle fashion brand’s market debut.
CEO Ersan Arcan tells The Moodie Davitt Report: “These openings are significant for expanding our market reach and enhancing our global footprint.”
The venture into Almaty Airport is especially noteworthy as it is a first for the retailer in Central Asia.
In the initial phase, ATÜ Duty Free occupies around 1,200sq m of core category duty-free space plus a Luxury Square concept in departures, as well as 300sq m of arrivals shopping. Soon to come in departures are local concepts plus monobrand and multibrand boutiques.
Arcan says: “In our duty-free areas at Almaty Airport, we focused on creating modern, well-organised stores offering a range of products from luxury goods to local specialities, aimed at providing a pleasant shopping experience.
“Additionally, the new terminal brought several advantages, including expanded retail space, which allowed for more room for a diverse range of products and improved store layouts.
“Improved customer flow led to smoother passenger movement, potentially increasing foot traffic, as we offer passengers a unique shopping experience in our conveniently located stores after passport control.
“Furthermore, ATÜ Duty Free enhanced the shopping environment with updated facilities, ensuring that customers can easily access all products through effective category placements and clear directions. And we have opportunities for refreshed branding and advertising thanks to our global and local product suppliers.
“Regarding early performance, we aim to increase sales figures, receive positive customer feedback, improve our operational efficiency and achieve higher foot traffic in our duty-free stores.”
Assessing the wider network, Arcan singles out a series of upgrades to existing stores, with fresh designs and technology additions to boost operational efficiency.
Examples include the main Bodrum-Milas Airport departures duty-free store, now featuring a walk-through concept, as well as Riga Airport stores that now operate with self-checkout.
“At nearly all our [stores] we increased our product offerings, including new luxury and local brands, to attract a broader customer base and cater to diverse traveller preferences,” says Arcan.
“These investments and openings are pivotal for ATÜ Duty Free’s growth, enabling the company to strengthen our presence in key markets, improve customer experience and stay competitive in the evolving duty-free retail landscape.”
With a network of over 20 stores managed by ATÜ, Istanbul Airport is a vital location. Sales continue to grow at double-digit rates, says Arcan, with visitor spend overcoming the impact of weakness in the Turkish economy and local spend.
He says the diverse traveller base, driven by the broad Turkish Airlines network, adds resilience to the performance.
“Istanbul Airport has firmly established itself as a hub of luxury, boasting over 20 monobrand boutiques featuring globally recognised names. We continue to enrich our brand portfolio with new deals. We are excited to welcome On Running, Stone Island, MaxMara and Jacquemus to Luxury Square, our multi-brand store.
“These additions reflect our commitment to providing a premier shopping experience for our passengers, catering to a wide range of tastes and preferences in the fashion & accessories and watches & jewellery segments.”
Arcan also speaks to the latest trends in luxury at Istanbul Airport, led by the rise of “experience-oriented shopping” after the pandemic.
“This shift is partly because travelling has transitioned from being seen as a ‘nice to have’ to a ‘need to have’, leading to growth in travel and other experience-based sectors. Big global brands are organising events centred around their collections, creating engaging stories and offering gastronomic experiences here in Istanbul.
“To engage travellers, we plan to leverage this trend by implementing tailored experiences that cater specifically to the needs and interests of those passing through Istanbul Airport. Our next steps include welcoming more pop-up experiences from our brands, blending luxury shopping with unique and enjoyable activities.
“One other notable trend among our local customers is the excitement and hype generated by new luxury brands coming to Istanbul. While Istanbul is a major city attracting tourists from around the world, its luxury industry is still developing.
“Unlike cities like New York, Paris or London, where one can find any luxury brand in the city, this unique aspect motivates some Turkish customers to shop with enthusiasm and anticipation when they come across a brand they have been seeking for a long time. That is why we make it a priority to search for brands that resonate with our clientele.”
Arcan adds: “We continue to see very successful results from boutiques. Despite the rising Euro exchange rate in Türkiye, sales have remained resilient in 2024. Notably, Turkish customers continue to be our second-largest buyer group, even amid challenges in obtaining visas [to travel overseas].”
He also assesses how other categories are performing, and highlights heated tobacco, vape and nicotine pouches as “the rising stars of 2024”, as consumers move away from cigarettes. This is most evident in overseas markets – as yet legislation restricts these emerging categories in Türkiye itself.
Other trends include a surge in ready-to-drink alcohol products such as whisky-cola, gin-cola and other small, refrigerated drinks. In spirits, gin sales have accelerated, which the company ascribes to its popularity in cocktails, even compared to vodka. Japanese whiskies also show strong growth from a smaller base.
Perfumes & cosmetics is a mainstay of the offer, one enhanced via store upgrades across the business last year, with new brand additions delivering sales growth and positive customer response.
Arcan says: “The niche perfume sub-category has boosted overall category performance, as have new brands in skincare. We are keeping a close eye on new developments in makeup and skincare to match customer demands and improve our assortment.”
Reflecting on overall performance in the year to date, Arcan says that sales are in line with target in its Turkish operations. “The macroeconomic background in Türkiye has been challenging but we have been able to manage this well. We maintain a price advantage compared to the domestic market, especially in the arrivals business, in addition to offering travel-exclusive assortments in an exceptional shopping atmosphere with expert sales service.”
Across the company at home and abroad, several key dynamics should help ATÜ Duty Free achieve its 2024 goals. Among them are strong passenger growth in markets such as Georgia and Tunisia alongside the impact of investment at Skopje, Tbilisi and Bodrum airport, plus the new Almaty Airport operation.
The continuing impressive retail growth at Istanbul Airport, now a true international hub, is a critical element.
“A significant driver of performance is Istanbul Airport’s status as a major hub for international transfers. Turkish Airlines has strengthened its dominance at Istanbul Airport after leaving Sabiha Gökçen Airport, meaning all Turkish Airlines passengers now use Istanbul Airport. We keep seeing the positive impact of this shift in our sales. Additionally, the airport’s increasing number of destinations and airlines continues to attract a diverse and expanding passenger base.”
Arcan concludes: “We are confident that these factors will continue to support sales through the remainder of 2024 and into 2025, positioning us for sustained growth in a dynamic market.” ✈
*For the full story in Magazine format, click on this link.
