NEW ZEALAND. Auckland Airport achieved solid commercial sales growth for the first half ended 31 December 2016 despite over a dozen stores being closed or operating from temporary locations during construction work.
Retail income rose +2.7% year-on-year to NZ$80.7 million (US$58 million) on a reported basis. However, retail growth was actually +6.4% excluding a one-off accrual release in the prior year. “Strong passenger growth, food & beverage and passenger products performance contributed to [like-for-like] retail income growth of +6.4% despite ongoing expansion work in the international terminal,” the company said.
Duty free [now run by Aer Rianta International and Lagardère Travel Retail-owned Aelia -Ed] is “performing well, reflecting retailers’ global expertise,” Auckland Airport said. A focus on core duty free products resulted in very strong passenger spend rate (PSR) growth of +22% in cosmetics and skincare and a startling +60% (albeit from a smaller base) in electronics. This was partially offset by modest PSR declines in liquor & tobacco, the company added.
Overall international terminal passenger spend rate rose +0.9% year-on-year despite the ongoing construction work to upgrade the international departures area.
Specialty and destination retail was negatively impacted by planned store closures as part of the terminal refurbishment, which will continue until late 2017.
Food and beverage sales surged by +18%, driven by an enhanced customer experience through a greater choice of outlets, including Urban Market Café and 1958 Bar & Eatery on Pier A.
Car park income grew +11.2% to NZ$28.9 million (US$20.8 million), on the back of passenger growth. ARPS rose +2.6% due to increased car parking space utilisation. Valet parking proved a big success with revenue up +29% year-on-year. Auckland Airport added 500 new Valet spaces in the six months plus 1,400 new Park&Ride car parking spaces (800 for public parking and 600 for relocated staff).
Major upgrade of international departure retail hub
The international terminal retail offer is set for exciting expansion this year, Auckland Airport revealed. The company has 45 units up for tender in the extended terminal space, which will open progressively from the middle of this year.
“There has been excellent interest from retailers in securing space,” the company said, noting that it was “confident in selecting retailers with compelling store concepts that sell products representing the best of New Zealand and the world.”
The company added: “The transformation of our duty free and tax free shopping experience will start to be visible from mid-2017.”
Strong long-haul traffic growth
Total international passengers (including transit) rose +12.9% to 5,145,243. Domestic traffic increased by +11.7% to 4,299,244, giving a total passenger increase of +12.4%. The growth in passengers occurred across a range of markets, notably North America (+37%), South Korea (+23%), Japan (+12%), Europe (+13%) and Australia (+6%).