Branded retail shops likely in airport

In What’s Happening in Retail by Elargirindia0 Comments

CHENNAI: The Airports Authority of India (AAI) will call a tender in a week to identify a contractor to set up branded retail shops in the domestic and international terminals at the Chennai airport.

Airport officials hope that the attempt will work this time as the terms and conditions have been tweaked so as to keep it attractive for the big names in apparel, leather goods, stationery and books, handlooms, handicrafts and other things. Though food and beverages and duty-free contracts were awarded and new stalls set up a long time ago, setting up of stores was getting delayed.

One master concessionaire will be appointed to rope in big names in retail, to allot space and generate revenue for the airport operator. Earlier, the AAI used to give individual contracts to retail shops. This system was discontinued as the process was cumbersome.

The two earlier attempts to rope in brands failed due to lack of response in the past two years. Airport director Deepak Shastri said, “We have analysed what led to poor response last time. The contract will be reviewed based on the analysis. The tenders are likely to be floated within a week.”

Sources said retail firms were unhappy last time because they did not get the kind of space they anticipated inside the domestic terminal. An official said, “Most of the retailers want to have shops inside the domestic terminal but only 30% of the space is available inside the building. The rest is taken up by food and beverages outlets. This raised concerns of poor brand visibility and low footfalls. In Chennai, the international terminal has more space, around 70%, for retail.”

A retailer said most of the key space had been allotted to food and beverages stalls and duty free shops as those contracts were awarded soon after the new terminals were opened.

Deepak Shanstri said retailers were not worried about prospects and availability of space. “There might have been concerns among investors about the uncertainty in expansion of the airport. There are no other problems that should deter retailers because the airport has registered a good growth, 30% in July and August.”

Shastri said, “We have given priority to connectivity over comfort. I do not want to cut down on the slots for airlines citing constraints in infrastructure. That would have pushed up the cost of flying for passengers. The inconvenience caused is temporary.”

The airport now had a good mix of food and beverages brands after Travel Food Services was roped in as master concessionaire.

Flemingo Dutyfree had opened a large store in the domestic departure area and was planning to open a bigger one in the international arrival area, near the baggage conveyors, to allow passengers to shop even after picking up their bags, sources said.

A few months ago, the wall between the old domestic terminal and the international arrivals was demolished to enable passengers from abroad to use more baggage conveyor belts.

An official said there was no ambiguity on the development of the airport. “The government has decided not to privatise and paperwork is on track to carry out phase-II expansion by demolishing the old domestic terminal and the international arrival.

Click Here for Original Source – Economic Times

Leave a Comment