"Shopping at the Airport in Times of Uncertainty"

Tuesday, November 5, 2002

Shopping at the Airport in Times of Uncertainty
By JOE SHARKEY
The New York (NY) Times


PITTSBURGH -- The last time I flew out of the airport here, it sure
wasn't any place to be hungry.

Of course, that was about 15 years ago, when the only thing you bought
in an airport, if you had other options, was a newspaper or a magazine.
Then, airport food and retail operations were represented by the $9
hamburger that resembled a boiled boot heel, and the $79 gift-shop
varnished pinewood music box that played "Laura's Theme" from "Dr.
Zhivago" and had the words "Greetings from Pittsburgh, Pa." stenciled on
the lid. 

Yesterday at lunchtime, though, while waiting for a midafternoon flight
home, I wandered Pittsburgh International Airport blinking at the
bewildering choices on display: 27 restaurants and snack bars, 43 retail
stores ranging from Eckerd Drugs to Victoria's Secret, more than a
half-dozen newsstands, a post office, a video arcade, a bank, two
massage parlors and a chapel.

Regular users of the Pittsburgh airport, where US Airways accounts for
about 90 percent of the flights, might well scoff at this revelation. In
1992, Pittsburgh was the first major domestic airport to thoroughly
redesign its terminal and concourses to accommodate a shopping mall-like
retail and food center called Airmall. The mall was developed and is
still managed under long-term contract by BAA, the company that runs
Heathrow and six other airports in Britain.

Airmall led the way in prompting American airports to spend many
billions of dollars remaking drab, military-style terminals into
bustling, well-designed places for passengers to shop and eat reasonably
well while waiting for a plane.

So it would seem to be a logical place to stop, look around and ask how
airport retail is faring these days, as business travel begins a slow
resumption toward levels of previous years.

Here at midday yesterday, restaurants and snack bars seemed to be doing
a brisk business, as many passengers relaxed over lunch or bought
take-out food to carry aboard flights where food service is now defined
as a half-ounce bag of pretzels. Newsstands, book stores and drug stores
also had a lot of customers. Clothing shops and jewelry stores appeared
to be empty, with bored clerks listlessly polishing glass display cases.


Some shops have been smart enough to anticipate shifts in buying
behavior caused by the peculiar hurry-up-and-wait environment at the
airports.

An example: a luggage and handbag store called Wilsons the Leather
Experts, where the sales clerk, Velia Mastramico, was busy showing off a
line of carry-on bags in various styles. Often, passengers who have just
struggled through security checkpoints with several bags will spot the
store's displays, come in, and immediately buy a new bag.

"I just had a gentleman come in with an older bag that he suddenly
decided he had to replace," Ms. Mastramico said, holding up the worn but
very serviceable leather valise that the customer left behind after
buying a new roll-aboard to consolidate carry-on possessions as he
bounded for his plane.

Innovation and smarter customer service like that may well be the key
for survival for airport retail operators nationally. Many have been
trying to negotiate breaks on their leases with airports, citing the
decline in passenger traffic.

Ira Weinstein, president of Airport Interviewing and Research, a firm in
White Plains, that does focus group and other surveys for airport
clients, said that airports needed to think smarter about passenger
behavior in the new environment.

On the one hand, people are still arriving at airports far earlier than
they did before the Sept. 11 terrorist catastrophe. But the time spent
at airports has started to fall off slightly, based on interviews Mr.
Weinstein's firm did in September and October with 4,000 travelers at
major hub airports, he said. 

According to that survey, the average amount of time spent at an airport
is 104 minutes. After ticketing and security processing, the average
amount of free time a passenger has before a flight is 85 minutes, which
theoretically should suggest lots of time for leisurely shopping or
dining. 

But there is a behavioral hitch. Right now, most passengers still feel
more comfortable heading quickly to departure gates, which are typically
away from the main retail areas. The average time spent at departure
gates exceeds one hour, said Mr. Weinstein, who believes airports need
to think more about providing a greater number of small but convenient
food, retail and newsstand outlets closer to gates.

After the terrorist attacks, the percentage of passengers who make any
purchase "spiked up to around 60 percent, from the low 50's," as people
lingered longer in airports, Mr. Weinstein said. Now about 68 percent of
passengers spend money shopping or eating in airports, Mr. Weinstein
said.

More than half buy only food and drinks. This category is experiencing
sharp growth, while retail is not. "Average spending on food and
beverage has gone up $2 to $3 since before 9/11 to about $8.50 now," Mr.
Weinstein said. "People know that airplanes often aren't serving food."

In Pittsburgh, the pioneer retailer Airmall is holding its own so far,
with $80.7 million in gross sales last year, slightly higher than 2000,
according to Airport Revenue News, a trade magazine. 

But Pittsburgh, where Airmall recently marked its 10th anniversary, has
a very big challenge to overcome. Slashing costs and operations as it
struggles to come out of bankruptcy, US Airways has cut about one in
five flights to and from Pittsburgh. More cuts may be coming to an
airport with only one major player.

"As US Air goes, so goes Pittsburgh," Mr. Weinstein said.


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