Airports are expected to lead the way to recovery in the global retail market as it is set to grow by more than 60 per cent by 2015 and be worth $44.1 billion, Datamonitor Retail has found.
The independent retail analyst has revealed that after a 5.1 per cent downfall in 2009 caused by the global financial crisis, 2010 marked the beginning of a recovery as airport retailers achieved growth of 8.4 per cent.
According to the report, global airport retailing is highly dependent on the international travel market. With the exception of 2008-09, global passenger number has risen 11.1 per cent, driven by the boom in low cost airlines and related new destinations.
“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,” Datamonitor Retail analyst Anne Marie Davis said.
The robust growth has been driven in Asia-Pacific and the Middle East and Africa. Asia-Pacific is set to overtake Europe to become the world’s leading airport market in 2015, with sales set to nearly double from $7.8 to $15.2 billion, the report said.
Within retail, beauty sales were found to be the fastest growing category with predictions that this growth will be driven by demand in Asia. Over the next five years this sector of airport retail is predicted to grow by more than 80 per cent, while growth in alcohol and tobacco is set to slow.
“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,” Davis said.
Instead, Datamonitor has suggested that in order for airport retailers to maximise sales, they need to broaden their distribution channels.
“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,” Davis said.