Moving time
It has been the subject of extensive legal and government disputes, with concerns about structural stability still being addressed. But at last, this year looks likely to bring a fully operational Terminal 3 at the Philippine’s major airport.
Or does it? Architectural consultants declared the terminal structurally unfit to open ahead of its latest proposed soft opening of late March. The government is demanding that the original construction company, Japan’s Takenaka Corp, puts right any weaknesses before the terminal opens.
Duty Free Philippines (DFP) has one departures and one arrivals store at the new terminal. The 700sqm departure store and the 300sqm arrivals store will each offer the main duty free categories, although it would preserve the operator’s focus on the prime category of confectionery.
While the terminal issue has simmered on, Duty Free Philippines reports strong trading from 2006 through to the end of Q1 2007. In the all-important confectionery category, DFP’s concession partner Eastern Duty Free (EDF) totally renovated its Terminal 1 departure confectionery shops and improved the mix to include more brand choices and higher-ticket items. “Business has definitely improved,” comments EDF’s David Weil. “We have brought in a huge selection of global brands and products that are not normally associated with duty free stores, and the results are stunning.”
Supported by promotions such as a Hershey raffle that offers prizes of cards, houses and land, the confectionery sector notched sales of $55 million last year and is performing well through Q1 2007.
In the tobacco category, Tabac, which operates the tobacco concession for Duty Free Philippines, launched additions from Habanos, Davidoff, Villiger, Danneman, Don Diego from Altadis USA, J.Cortes, Neos, and Domingo RYOs.
“When we decided to take on new brands or sub-brands last year, we were not really expecting a strong reaction, but more than half of the new items we took on showed either strong or very encouraging numbers. I would say that this move for more brands would be the highlight of 2006,” says Jacob Policarpio of Tabac. “We think that the opening of Terminal 3 would have a very positive impact on the Philippine economy as a whole. The government needs to ensure the structural integrity of the building. It needs to have an efficient system in place, and it needs to have the court case finally settled so that there will be no foreseeable disruptions in the future. The government is on its way to ensuring all these things and we look forward to its opening this year.”
Retail space in the new terminal is limited but Duty Free Philippines will be ready for the opening. “If the area is going to be relatively small, it just means we have to be more creative in generating awareness and developing a very efficient product mix to take full advantage of the available space,” Policarpio notes.
Until T3 is fully operational, the focus remains on optimising the current operation. David Weil sums it up: “Our business has grown tremendously and as long as we have a roof over our heads and products to sell we will do whatever we can to get those sales.” n
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