Retail Update

Activity remains robust at airports
As concessionaires compete for requests for proposals and look for opportunities to expand, airports strive to increase revenues. Whether it’s the addition of a proven nationwide food chain to a profit-lagging terminal, taking a chance on an unproven local café concept, or adding an upstart disadvantaged business enterprise manicure shop, concessionaires and airport executives continue to explore new ideas. Here’s a sampler of industry activity.


The first Hudson News/CNN Newsstand opened its doors in BAA Pittsburgh’s AIRMALL in the D concourse at Pittsburgh International Airport. The co-branding not only adds the CNN name, but televisions broadcast live Headline News in a rebuffed store designed to portray a TV studio motif around the newsstand.

Laura Samuels, director of corporate communications with the Hudson Group, says that the CNN/Hudson Newsstand now becomes a “double news source” as customers can watch live news coverage as they are purchasing print publications. “[Hudson’s] patrons are changing and people are customizing their news when they want it,” Samuels says. “The CNN brand is a great step forward for the customer, because he can then satisfy his immediate need for news and information in the same place where he’s buying his reading material.”

The move to live coverage is to steer away from the canned reports looped on closed circuit television in airports. For passengers who don’t carry a laptop or blackberry, but still have a desire for information, the newsstand will provide an alternative, timely news source, she explains.
“If something happens to Anna Nicole Smith, there it is live,” Samuels says. “There is Anderson Cooper.”


HMSHost has been awarded a 15-year lease extension at Jacksonville International Airport to include 13 new eateries and upgrades to existing facilities. The extension marks the seventh Florida airport operating under HMSHost. The company will inject local Jacksonville flavor with Sam Snead’s Tavern and Sam Adams Toasts Jacksonville.

HMSHost will also tap the NASCAR phenomenon with the Budweiser Racing Track Bar & Grill and add sports-themed Budweiser Stadium Club to the airport.

HMSHost has also been awarded contracts to develop new food and beverage facilities at Nashville International Airport and El Paso International Airport. The 13-year contract with Nashville — with estimated revenues to exceed $182 million over the life of the contract — will feature the Gibson Café, celebrating the Nashville guitar maker.

In El Paso, HMSHost was awarded an eleven-year, $105 million contract to operate more than 14,000 square feet of space in the airport’s main terminal and concourses A/B.


First Class Seats rolls out its relaxed workstation at seven American Airlines locations in ‘C’ terminal at Dallas Fort-Worth International Airport, bringing the company to a total of 16 locations at DFW. The workstation offers a place to sleep, charge a cell phone or laptop, and listen to music ($1 for three minutes).

“Our concept is not massage,” First Class Seats president Mark Eberhardt says. “Our concept is a first-class seat in the airport. If the airlines will sell you a first-class seat on the airplane and your wait in the airport could be longer than it is in the airplane, then why shouldn’t you be able to buy a first-class seat in the airport?”

After a positive reaction to the first installation at Mitchell International Airport in Milwaukee, the Wisconsin-based company expanded to Albany and Nashville.

“The [relaxed workstation] doesn’t require any build-out space. It’s simply a matter of exchanging an airport chair for a first-class seat,” says Eberhardt.


HDS Retail, North America enters into a license agreement to develop and operate an airport retail concept themed around the USA Today brand — the USA Today Travel Zone — to be introduced into airport concessions programs.

“USA Today is the preferred newspaper for travelers,” says HDS executive VP of business development Gerry Savaria, “moreso for business travelers. It is very user friendly, very visually attractive, and we would think that there is brand equity that can be passed on to the airport environment where travelers are already familiar and comfortable with the brand. We think that this would have a lot of appeal in the sense that there’s strong brand recognition and we could also have a lot of fun with the strong graphic content.”

HDS is investing in the redesign of its stores, featuring a dramatic storefront element. The concept, says Savaria, is particularly interesting in terms of materials being used: quartz countertops, tile on the storefront, etc. “We have very dramatic graphic treatment which allows us to communicate a strong sense of place,” he says.

Using the HDS stores at Toronto Pearson International Airport as prototypes, HDS focused on rethinking its core brand, Relay, and has incorporated it into future redesigns in North America.

Another element HDS will soon introduce is a multimillion dollar point-of-sale system. Partnering with Dallas-based Fujitsu, HDS’s new system has new features that can be activated depending on the store need and location, including a remote checkout using handheld units. “If there is a rush because a flight is delayed or people are coming in droves to the newsstand, we can accelerate the queues at the store,” explains Savaria. The new system will also have the capability to use self-scan kiosks.

The POS program features a database that feeds from the central office to the retail outlets to maintain pricing efficiency and inventory.

Everything is downloaded to update our database at the store level from the central office so we have a 100 percent scanning rate of whatever we sell in our stores, which in turn allows us to optimize the merchandising of our stores individually and drive our revenues,” explains Savaria.

We know what we’re selling and where; we can anticipate sellouts better and keep full in-stock position. At the end of the day it results in higher revenues, and higher revenues result in higher rent for our airport partners.”

The POS is scheduled to be implemented systemwide in the next few months.


Massage Bar, some 13 years in the airport business, adds a tenth client to its portfolio. Sacramento County Airport System unanimously awarded kiosk space in Terminal A, in the central mall area, to provide the new service, with a target opening date of June 2007.

Massage Bar president Cary Cruea emphasizes that kiosk space can be just as valuable as in-line store space. “We started out at kiosks and we have a couple of in-line store spaces; however, we can make just as much money in a kiosk as we can with a store.”

At Massage Bar’s busiest kiosk site — C concourse at Seattle-Tacoma International Airport — the business generated approximately $1 million in revenue out of a 240-square foot space, according to Cruea. Because of the company’s success in Seattle — and repeat business accounting for 80 percent of its business — Massage Bar is scheduled to open a new 1,200-square foot in-line store space to replace the Sea-Tac kiosk in May 2007.

Massage Bar’s latest concept is a twist on the food court: a spa court, or centralized area for services ranging from manicures and pedicures to massages. “When the airport wants you to provide all of these different services — haircuts, manicures, pedicures, massages and more — 1,200 square feet isn’t that large. When you try to throw everything into one store space, you’re really not able to offer equal services,” Cruea says. “Instead of just having one big monster store trying to throw everything in the same store, use a common area, whether it’s reclaimed gate hold space or something of that nature, and put in separate service providers.”

Massage Bar is looking to team up with other spa service businesses to present a united front to airports as a part of a spa court concept. Cruea suggests that “if an airport were to set up a service court, they would get individual providers -- massage, manicure, shoe shine, barber -- in the same general area. Then the airport would have the advantage of having four different leases, each being a [potential] DBE tenant.”

 

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