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Gebr Heinemann is the incumbent duty free concessionaire but will face two stern challenges |
DENMARK. Copenhagen Airports (CPH) has issued a selective tender for its duty and tax free contract at Copenhagen Kastrup Airport to three parties – incumbent Gebr Heinemann and two others, World Duty Free Group and Aelia, part of LS travel retail EMEA.
CPH Key Account Manager Anni Thøgersen confirmed the tender had been issued this week to the three retailers. Each must respond by the end of February 2012, after which the three players will deliver presentations to CPH. “We expect sign off by May 2012,” Thøgersen told The Moodie Report.
The current contract ends in February 2013, with the new five-year concession starting on 1 March that year.
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Commenting on the selective nature of the tender process, Thøgersen explained that the airports company had conducted a “pre-screening phase” from January 2011, in which it had contacted various retailers to discuss the opportunity. It also spoke to other airports and brand owners, including a full evaluation of the business practices of potential partners, ranging from management of out of stock situations to payment terms.
“You can always argue the pros and cons [of different tender models],” she said. “But in the current market conditions we prefer a limited number of partners and a qualitative process.”
While the number of stores will remain the same under the new concession, CPH plans to enlarge three of the shops, Thøgersen said.
Excitingly, the e-commerce site (below) will be “totally refurbished” she said, creating much more flexibility and more cross-selling opportunities. The new-look site will be closely linked to an enhanced loyalty programme.
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PRICING VALUE WITHIN NORDIC REGION
Pricing will be a key consideration for the incoming concesssionaire.
Prices at the duty and tax-free stores at Copenhagen Airport are lower than at the neighbouring airports in the Nordic region, according to a price check made this month by Norwegian newspaper Aftenposten.
Aftenposten compared the prices of 25 randomly chosen products in the duty free and tax free stores at Oslo Gardermoen, Værnes, Flesland, Kjevik and Sola (all in Norway), at Stockholm Arlanda in Sweden and at Copenhagen Airport.
The newspaper compared the prices of two shopping baskets and in both cases the one from Copenhagen Airport had the lowest overall price tag.
When compared with the shopping baskets from Stockholm Arlanda, which turned out to be the most expensive, the baskets from Copenhagen Airport were about DKK110 (US$20 and about DKK87 (US$15.70) cheaper, respectively.
Gebr Heinemann Retail (which also runs the airport stores in Norway) conducts price checks every six months to ensure that prices at its duty and tax free stores are always -20% below the recommended selling prices on the Danish market for perfume and cosmetics.
“Competition is very intense in the Nordic Region, and we make great efforts to ensure that we offer wine, liquor and cigarettes at prices that are, as a minimum, competitive with those charged by our Nordic colleagues. The Aftenposten price check shows that our efforts are having the intended effect, and that is very reassuring,” said Tore Hov, General Manager of Gebr Heinemann Retail Denmark.
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