"Hartsfield airport retail sales reaching an unprecedented altitude"

Sunday, December 5, 2004

Airport retail sales reaching an unprecedented altitude
By Mary Jane Credeur 
The Atlanta (GA) Business Chronicle


The record number of passengers coming through the Atlanta airport this year
is expected to drive airport retail revenues to a new high. 
 
Hartsfield-Jackson Atlanta International Airport, which already has the
largest retail operation of any airport in the country, is on track to do
$289 million in retail sales this year. 

That figure, which includes duty-free plus food and beverage sales and other
services, would be about 18 percent higher than last year's $244.6 million
in retail sales and would set a new record for Hartsfield-Jackson. 

Airport General Manager Ben DeCosta attributes the increase to higher
passenger counts, greater diversity in the types of shops in the airport,
plus an increase in "dwell time" after travelers get through security lines.


"People tend to arrive with more time to spare since security can be
unpredictable, so there is more dwell time than a few years ago," DeCosta
said. "When they are waiting, they want to get something nice to eat or buy
something to read or look through shops." 

Airport retail analyst Evan Futterman, who heads aviation services for
construction, architecture and planning firm HNTB Corp. (which does aviation
projects across the country), expects many airport retailers to see 5
percent to 10 percent growth during the next couple of years as business and
leisure travel continues to grow. 

Hartsfield-Jackson expects to handle 85 million passengers this year,
breaking the previous record of 80.2 million passengers in 2000. Passenger
counts across the country are bolstered by cheaper airline fares from
low-cost carriers such as AirTran Airways Inc. and JetBlue Airways Corp.,
which are competing intensely with legacy carriers like Atlanta-based Delta
Air Lines Inc. on ticket prices. 

Factor in security lines that can easily take an hour or more, and Futterman
said it's no surprise that travelers are spending more time -- and more
money -- on retail shops at the busiest airports. 

"You're getting to the airport at least an hour and a half or two hours
before your flight, and sometimes security takes an hour and sometimes it
only takes 10 minutes, so there's a lot more time to kill," Futterman said.
"Plus, the airlines don't serve food anymore on most flights, so it's really
a necessity to have restaurants and shops for passengers who are waiting." 

The average passenger coming through Hartsfield-Jackson spends about $6.72
while at the airport, according to Concessions Manager Kyle Mastin. 

He said that figure often jumps when inclement weather delays flights, or
during peak holiday and business travel times. 

"You can actually look at sales and figure out when it was raining and when
flights were delayed," Mastin said. 

One thing Hartsfield-Jackson struggles with is its somewhat outdated design
of retail space in the terminals, DeCosta acknowledged. Many of the
country's largest airports, including Hartsfield-Jackson, were built several
decades ago, when unticketed people could meander through airports while
waiting for friends and relatives to arrive or depart. 

Retail shops were usually tucked into small spaces scattered throughout the
terminals, and there wasn't much focus on branding or high-end stores. 

"It used to be just coffee and a newspaper for sale," DeCosta said. "There
were no branded stores at all." 

Airport retailers became more sophisticated in the 1980s and '90s, putting
national retailers and branded restaurants in airport atriums and terminals.
Some airports, such as Minneapolis and Pittsburgh, went as far as building
entire malls in the terminals occupied by key airline tenants. 

"Retailers started to view airports as a special kind of store that got
steady year-round traffic, and they put more thought into planning sight
lines and locations and square footage," Futterman said. 

The 9/11 attacks changed the approach on airport retailing, as federal law
now requires unticketed people to stay behind security checkpoints. 

Airport retail figures dropped at every airport in the country as passenger
levels also plummeted. 

Luckily for Atlanta, the bulk of the 230 retail stores are past the security
checkpoints. And although many stores in Hartsfield-Jackson also saw sales
dip after 9/11, the quick rebound in passenger traffic buoyed retail sales. 

A Wendy's restaurant in Concourse C is the highest-grossing store in the
chain, and the Chili's Too and TGI Friday's often hit the highest sales
marks for the franchises several months out of the year, Mastin said. 

"Atlanta does have a good spread of stores past their security lines, and
they have hired more people with a retail background to make the whole
experience better for the passenger," said Pauline Armbrust, publisher and
editor of Airport Revenue News, which tracks retail trends at airports. 

Retailers at Hartsfield-Jackson have even started to grumble that their
stores are too small to accommodate enough people during peak times, DeCosta
said. Airport officials are talking with some of the airlines about possibly
taking back some square footage in the terminals so stores can expand. 

"Ideally you'd have more square footage for retail expansion, but we're
limited by the layout [of the terminals]," he said. 

DeCosta noted Hartsfield-Jackson is taking a new approach to retail
operations in the new Maynard H. Jackson International Terminal, which is
under construction. 

"We are doing everything we can to ensure the best experience possible for
passengers coming through the world's busiest airport," DeCosta said. "We
are constantly asking them what they want, then trying to go out and get
it."


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