NORWAY. Gebr Heinemann-led Travel Retail Norway and Norwegian company Airport Retail Norway (ARN) have captured the duty free retail contracts at Norway’s leading airports, airport company Avinor announced today.

Incumbent Travel Retail Norway will run the duty free and Travel Value stores at the largest airports: Oslo, Bergen, Stavanger and Trondheim. ARN has won the contract to operate for stores at the airports in Kristiansand, Ålesund, Molde, Kristiansund, Bodø, Evenes and Tromsø.

The tender was issued in January, with extensive coverage of the opportunity provided by The Moodie Davitt Report, in partnership with Avinor. At the time, Avinor Executive Vice President for Commercial Areas Joachim Lupnaav Johnsen said that the company was open to having one or multiple winners of the packages.

The estimated total value of the contracts is over NOK30 billion (around €3.4 billion) in turnover over the term from 1 January 2023 to 31 December 2027. Avinor said it expected to receive NOK18 billion (US$2 billion) in revenue over the contract period.

Avinor projects a robust recovery in passenger traffic from 2022 and estimates the value of the duty & tax free contract at around NOK30 billion (€3.4 billion) over the term from 2023 to 2027

Avinor said the tender attracted six offers. It hailed the “widespread international participation” and “strong competition among the bidders”.

Avinor CEO Abraham Foss said: “Earnings in the tax-free retail area are important to Avinor and the operation of its Norwegian network of airports. Faced with stern competition, TRN and ARN both submitted the best tenders evaluated in terms of quality and finance. We are very pleased with the outcome of this tendering competition, and we look forward to working together with the winners.”

Sales in international arrivals are particularly strong and represent more than 50% of the duty free business at Oslo Airport Gardermoen

Gebr Heinemann hailed the decision to award its partnership a new contract via a statement on LinkedIn: “Airport operator Avinor has awarded our joint venture Travel Retail Norway the concession to continue its retail operations at Norwegian Airports in Oslo, Bergen, Trondheim and Stavanger. Together with TRN, we strive to continue to cater to the needs of passengers at all Norwegian Airports and to set the future course for Norwegian travel retail. The trusting and long-standing partnership with Avinor and TRN’s commercial achievements of the past form the perfect foundation for this.”

Travel Retail Norway is jointly owned by Norse Trade AS and Gebr Heinemann. Norse Trade is jointly owned by Terje Stykket and NorgesGruppen. Both retailers have been partners of Avinor for many years.

Airport Retail Norway is part of Airport Retail Group, which runs fashion & accessories and tax free shops, primarily in the Nordic region. Airport Retail Group is a wholly-owned subsidiary of Jotunfjell Partners AS, a private holding company registered in Norway. Among other locations, the company currently operates the tax free store at Torp Sandefjord Airport.

Summarising ARN’s offer, Avinor stated: “The bidder presented a simple and cost-effective concept, adapting its operations to smaller airports. Stores will be upgraded to feature new elements allowing for local customisation. The bidder demonstrated a clear pricing strategy that meets Avinor’s expectations in relation to cost savings for customers. The bidder met Avinor’s expectations in digital terms, including its proposed click and collect solution.

Of Travel Retail Norway’s winning bid, the airport company said: “The bidder had a very good business plan focusing on building digital revenues, clearly specified with ambitious targets. The concept is clear, attractive and flexible, with a holistic strategy that will seek to increase customer share. The concept met all expectations in terms of price savings. Highly efficient logistics solution and short delivery times for click and collect orders. Dedicated warehouse for Norwegian ecommerce. Excelled with its emphasis throughout on sustainability and specific environmental initiatives.”

Avinor carried out the procurement process in accordance with the Public Procurement Act and the Regulations on Concession Contracts. It said the project adhered to key principles concerning equal treatment/non-discrimination, predictability and transparency/openness throughout the tendering process. An integrity due diligence (IDD) process has been carried on both TRN and ARN, as well as all other participants in the competition. No facts of significance to the award of the contracts were uncovered.

In 2019, revenue from tax and duty free stores represented 28% of total revenues from airport operations and amounted to NOK2,904 million (US$336 million). The Travel Value stores had revenues of around NOK80 million (US$9.3 million).

A ten-day appeals window will apply prior to the final award of the contracts, Avinor said.

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