Bright outlook for global travel-retail

Nicole Mezzasalma

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A Verdict Research report expects retail sales at airports to grow by 11% in 2008 despite economic pressures

The future is bright for the global travel-retail and duty-free market, according to a new survey by London-based company Verdict Research. The Global Airport Retailing 2008 report said that retail sales are expected to grow by 11% in 2008 to $30bn, compared with $27.1bn in 2007. The result would make it the fastest-growing retail channel after the Internet, largely due to the increase in air travel in emerging markets and investment in new airports and retail facilities.

The report added that Asia/Pacific and the Middle East are the regions that would offer the “most exciting opportunities” for travel retailers because these areas offer huge scope for growth compared with the “regulated and restricted mature markets” of Europe and North America. Verdict forecasts that in 2012 the Middle East will be responsible for 14.4% of the global retail spending at airports, a significant increase from the 11.8% share it currently represents—retail sales in the four major Middle East markets of UAE, Qatar, Bahrain and Oman more than doubled to $1.2bn between 2002 and 2007, and Verdict expects sales to double again to reach $2.5bn by 2012.

Asia/Pacific airport retail sales will represent 23% of the global market compared with the 21.9% share the region had in 2007. The growth potential of China, which Verdict said is expected to become the world’s most popular tourist destination, should increase retail spending at the country’s airports from $300m in 2007 to $612m in 2012. The research company also highlighted India as “a key market in global airport retailing”, which already features investment from international airport operators such as The Nuance Group and Autogrill-owned Alpha Airports Group and is expected to register an increase in retail spending from $127m in 2007 to $318m in 2012.

Verdict Research lead analyst and report author Nick Gladding said: “The key factors stimulating this growth are increased affluence, growing tourism, rapidly expanding airline networks and new routes, especially those of low cost carriers. The increase in business travel as a result of globalisation is providing a further boost to airport retailers.”