Retail Hubs

In its expansion project the airport has had to move about 13,000- sq. ft. of office space occupied by American Airlines to another area. "This is prime time space for us. The amount of dollars that can be generated are about $6 to 7 million in net revenue for just this one area," Griggs states.

O'Hare is considering developing long-term, off-airport storage in the next five to seven years, Brown says. An analysis on how to handle off-airport distribution will be conducted over the next three months.

MSP has incorporated storage into the design of its new concession areas. "In the new RFPs that went out for the Green [concourse] and the expansion area, we purposely designed and set aside designated square footage back stock storage space adjacent to where the mass of the retail and food and beverage was going to be, recognizing that problem," Anderson states.

The airport also encouraged its tenants to design their stores with an office back stock area to prevent deliveries from being left outside stores.

BRAND ADAPTATION
As airports have begun renovations and new construction to bring a taste of their city to their airport, one noticeable trend has been the entrance of brand name street stores into the airport arena. Staples and A & W are two of those businesses.

Staples, Inc., which opened its first airport store at Philadelphia International last year, also has locations in Boston Logan International and soon, Newark.

Staples has found most of its airport customers to be business travelers explains John Barton, executive vice president for development.

"It's an extension of our business to provide the office supplies and services that we offer our customers in airports," he states.

One challenge for Staples' airport locations was to select products that would sell well in an airport. "We selected products for our airport stores that are easy to carry out of the airport express stores and we gear them more to the business person," Barton states.

Items such as digital cameras and small electronics have been selling well, says Christina Aeres Erridge, manager of media relations. One of the biggest selling items in the airport locations has been the palm pilots. "They are leading the chain in terms of units sold," she states.

Space constraints have also presented a challenge for Staples as well. "Éyou want to get as much product in there as possible. Some of the challenges were how to display the product and still make it easy to shop for the consumer," Barton says.

A & W's first entry into the airport arena was in Norfolk Airport with Anton Airfoods. Bill Anton, president, Anton Airfoods, which has contracts with about 25 different brands in airports, says one of the challenges in bringing national brands into airports is the difference in the environment. "The first challenge is for the brand of the franchise to realize that in a non-traditional location everything is different. The space constraints are different, the passenger dynamics are different," he states.

According to George Goulson, executive vice president of development for A & W, another challenge is the crowds. "The difference is that you have these huge rushes throughout the day unlike the restaurants on the street where most of your business is done around lunch or dinner ... it's absolutely dead and in 15 minutes it's so crowded," he says.

Pricing and other areas of the operation are handled the same as on the street, Goulson states. "You're serving customer that you serve on the street, the only difference is they're in an airport." he says.

Targeting a good workforce
Finding a stable workforce for concessions programs is one issue many airports struggle with. Chicago O'Hare International (ORD) and Minneapolis-St. Paul International (MSP) share their recruitment efforts.

ORD has been working on some unique means to recruit employees into its concessions program.

Airport Retail Management (ARM) is working with the DOA's project management team and community-based organizations to recruit a reliable work force for the airport by offering job fairs, where merchants can make attendees aware of the opportunities at the airport.