Quality quintet of travel retailers vie for Auckland Airport duty free contract

NEW ZEALAND. Bids closed on the Auckland Airport duty free tender yesterday and The Moodie Report understands reliably that five parties have tabled offers – incumbents JR/Duty Free and DFS Group; LS travel retail; Lotte Duty Free; and Aer Rianta International (alone, not with a local partner as previously stated -Ed).

As reported, Auckland Airport issued a Request for Proposals (RFP) on 21 July.

Ten Expressions of Interest were received before the RFP was issued. The new concessions are expected to start trading on 1 July 2015. Based on 2013 figures, Auckland (New Zealand’s busiest gateway by a wide distance) is Australasia’s second-biggest airport after Sydney in international passenger terms.

Head-to-head: Auckland will retain its dual-retailer model, which currently features DFS and JR Duty Free facing each other across an aisle (pictured is Arrivals). But who will be the winning duo this time round

Auckland Airport declined to comment on which parties have bid but its management are certain to be delighted with the strong interest shown and will rightly feel that they are spoilt for choice in terms of having attracted a quintet of quality retailers, all featuring within The Moodie Report’s Top 25 Travel Retailers (based on 2013 sales and embracing all travel retail business not just duty free) – DFS (number 1); LS travel retail (3); Lotte (4); Aer Rianta International (15); JR/Duty Free (18).

The incumbents are DFS Group and JR/Duty Free, with Auckland Airport again opting for a dual-operator, duplicated-categories model in line with the [misguided in our view -Ed] wishes of the New Zealand competition authorities].

The Auckland RFP included the core duty free sites (offering liquor, tobacco, fragrances, cosmetics and confectionery) plus other retail categories. The airport is also offering what it describes as “a significant new opportunity” in a 400sqm last-minute duty free store close to gates 1-10.

A number of specialty sites are also available, including a new 214sqm area on Level 2 opposite the proposed last-minute outlet.

Auckland Airport is understood to have focused its RFP on four key attractions for retailers. These include the unique, strong and stable trans-Tasman (New Zealand and Australian) market (critical for both Arrivals and Departures duty free); the rise in Asian and particularly Chinese travel to New Zealand; the ability to grow current levels of business; and the airport’s collaborative approach with retailers.

Throughout the tender process the company was particularly keen to underline that it does not “set and forget” the terms of its retail partnerships, arguing that it consistently aims to optimise existing business and work with retailers to increase customer engagement and sales.

We’ll keep you posted as one of Asia Pacific’s most important and intriguing tender contests progresses.

Auckland International Airport is seeking two retailers that can deliver world-class standards and services, aGeneral Manager Retail & Commercial Richard Barker and Retail Business Development Manager Lucy Thomas told The Moodie Report earlier this year
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