Discover America
An increasing number of European-headquartered companies are developing their presence in North American travel-retail. David Davies speaks to three such organisations: ARI Sardana, The Nuance Group and SSP
It’s a massive, diverse and challenging
market, but the potential rewards are enormous. No wonder, then, that the last few years have seen a number of companies based in Europe turn their attentions to the Americas and a travel-retail sector that, by comparison with many of their home markets, has historically been somewhat under-developed.
Aer Rianta International is among the companies to have been exploring opportunities Stateside in recent years. Focusing on north America, the company has been working in cooperation with privately-held Austrian duty-free and duty-paid operator The Sardana Group. The partnership has been trading at JFK international since 2003 and now operates a grand total of 11 stores in Terminal 4, while later this spring it will add a Runway Fashion outlet in Terminal E of Boston Logan International Airport to its portfolio.
Speaking to Frontier, ARI Sardana JFK Inc general manager/president Bart Collins says that while the operation does bear the imprint of its parent organisations, it must necessarily remain attuned to the specific characteristics of its chosen market. “We generally operate under the prevailing business acumen of our mother company,” he notes. “However, ARI Sardana JFK Inc is extremely sensitive to the fact that what may work elsewhere in the world may not always be applicable in the US, and our strategies therefore must adjust accordingly.”
The focus that has emerged from these multiple influences is on, as Collins puts it, “the most sought-after brands in the fashion, jewellery and accessory categories in highly desirable shopping
environments.” One of the most high-profile manifestations of this approach has been the development of a lifestyle fashion store called Runway New York that retails American lifestyle fashion brands such as Oakley, Quiksilver, Zoo York and Roxy.
“The store has been very popular with the 20- to 40-year-olds as we expected, and the results have been very positive,” says Collins. “[In addition] we recently introduced a Manhattan hat designer to our stores, Kokin Hats – a genuine New York City product. This is a first in any US airport. We like to be innovative and on the cusp of what is new.”
Invited to consider ARI Sardana’s wider strategy towards the American market, Collins remarks that the partnership is “constantly mindful of business trends in the US, and we always gauge whether opportunities exist that may be of interest to ARI Sardana JFK Inc. When a company can operate in the US and particularly in New York, it proves to be a very resilient business entity capable of being successful in the most visible of locations in the world. That adds a lot to a company’s reputation.”
25 Years in Toronto
Headquartered in Switzerland, The Nuance Group is another European-originating retailer with a formidable influence in North America. The company’s presence in the region – which currently accounts for approximately 10% of the retailer’s total global business – is headed by its stores at Toronto Pearson International Airport, where the company has had an operation since 1983. It has also had a profile at US airports, among them Las Vegas, since the mid 1990s.
Recent developments include the opening of two new post-security duty-free shops and a 11,000-plus sq ft main store – one of the largest duty-free stores in North America – at Toronto early last year.
“Our concession in Toronto is our largest sales volume operation in North America with over $70m in sales in 2007,” confirms John Menchella, senior vice-president, business development for The
Nuance Group.
The company is continuing to develop elsewhere in the region, however. It recently won the Terminal 1 to Terminal 3 duty-free concession at Chicago O’Hare International Airport through a joint venture with DFASS and a local minority partner, and secured a seven-year extension to its duty-free concession at Calgary Interntional. Also, it is currently in the process of building and refurbishing stores at Fort Lauderdale-Hollywood International Airport, where it is represented by Broward Duty Free, a partnership comprising Nuance, The DFASS Group and Williams and Hope Corporation.
Menchella implies that continual renewal and refinement of the retail offer is vital in the North American market, where customers have long enjoyed a remarkable wealth of shopping opportunities. “The North American traveller has many retail choices, and retail competition is intense due to a well-developed domestic market,” he says.
“Additionally, like most airport travellers, their primary focus when going through an airport is not retail. In most cases, you need to capture the traveller’s attention and provide them with a service
offering within a relatively short period of time.”
Looking forward, the retailer will remain open to further expansion in the region as and when appropriate. “Nuance is constantly looking for new profitable growth opportunities in North America,” confirms Menchella.
Striding forward Stateside
Originally coming to prominence as a provider of food & beverage services to the UK railway
industry in the late 1940s, SSP is another company with a very strong European presence which is also now making great strides in the Americas. At the time of writing in February 2008, the company has a presence at 42 airports across the USA, Canada and the Caribbean, encompassing a grand total of 167 outlets. While this might sound plenty to be going on with, SSP’s Amanda Leonard reveals that the recent rebranding of SSP’s US operation, Creative Host Services, actually presages a further period of significant growth.
“In January this year, Creative Host Services was rebranded as SSP America in a move that marks the end of a year of major change and the beginning of a new era of radical expansion within the US marketplace,” she says. “SSP America has wide-reaching new strategies in place to achieve these ambitions. Along with Europe and Asia, the US is a market that will be one of our main areas of focus, and it’s certainly a region where we see much opportunity for growth.”
To support what Leonard describes as “a strategic decision to invest heavily in our North American division”, SSP has recently undertaken a significant recruitment drive, taking on experienced staff at all levels of the company, and introduced an ambitious new training scheme in partnership with Rosen Hospitality College, which is part of the University of Central Florida.
The company has also recently completed the first phase of a 3.2m euro global research study intended to inform the future development of its brand portfolio. “As a result, prominent offerings in SSP America’s portfolio will include brands focused on the premium and luxury end of the market, healthy options and quality, freshly-prepared ‘grab & go’ alternatives,” says Leonard.
These measures taken, SSP will continue to move forward on the basis that travellers expect to see a mixture of international, national and local brands and concepts. “We know that our customers can be categorised according to the mood or ‘need state’ they’re in, and we make sure that there’s the right brand in the right place to meet each of these needs,” elaborates Leonard. “This means that we need to offer a range of brands across a number of different categories, from fast food, bakery or coffee shops, through to luxurious seafood bars such as our Caviar House & Prunier Seafood bars or sophisticated brasseries such as our Le Grand Comptoir brand.”
By way of example, Leonard points to Houston Intercontinentinal airport, where travellers can expect to encounter everything from the high-end, ‘indulgence’-oriented The Palm Restaurant to convenience brands such as Panda and Peets Coffee and Einsteins bagels.
“The choice of brands at each location is driven by our insights into the needs and behaviours of consumers at each location, and our portfolio is developed to respond to these needs,” says Leonard. “In the US, we know that our customers don’t just want to ‘re-fuel’. They also want an experience that offers them a little luxury and some sanctuary from the pressures of travelling. Indeed, health and well-being is also an issue that’s been reflected in our current brand portfolio.”
In terms of new brand developments, SSP will continue to support its US-originating brands (among the aforementioned Peet’s Coffee, Panda and Dunkin Donuts) while also seeking to explore new opportunities for its international brands. “Names that we expect passengers in the US will love are Caviar House & Prunier seafood bars, the Camden Food Company (offering customers a range of healthy choices), our bakery brand Panopolis and Upper Crust, as well as the real good company and our Flavours convenience stores.”
Specific projects at present include a $14m redevelopment programme of the company’s operations at JFK that will see the introduction of a number of European brands and “new national players” (including Panda Express and Tigin Irish Pub) to this vital hub airport. SSP is also relocating The Palm Steakhouse to a pre-security location “so that all visitors to JFK can enjoy this NY institution”.
As the experiences of these three companies demonstrate, it is entirely possible for businesses with historic roots in Europe to establish successful operations in the Americas. It seems a near-certainty that others will follow suit in the future as more and more US airports update and renew their retail and service provision in such a way that their offers can be considered to be on a par with the leading European and Middle Eastern airports.
Delicious
Digg
StumbleUpon
Facebook
