There are increasing opportunities for retailers to exploit the flow of international passengers, finds Collier International
Major international transport hubs, such as Edinburgh, Glasgow and Heathrow airports, present a burgeoning specialist retail property sector which must be factored into the plans of any brand looking to establish an international profile.
That’s according to global commercial real estate firm Colliers International in response to new research by Swiss tourism tax refund shopping company Global Blue, which found that year-on-year retail sales have increased by more than 8% across Europe.
Paul Souber, Head of Retail Agency London and Co Head EMEA Retail at Colliers International, said: “These findings are in line with our experience of advising a number of retailers on taking space at transport hubs. It’s fascinating to see how the retail offer at airports and stations is broadening.
“Not that long ago, if you were heading off on holiday and were at an airport, port or train station with time to kill and money in your pocket, the options were fairly limited. There’d be a newsagent, tourist gift shop, some – often uninspiring cafés – and duty free if you were about to board a plane or ship. Tapping into that ‘shopping on the move’ trend is becoming increasingly vital for landlords and brands.”
Colliers International says Chinese tourists are at the forefront of this trend since they are already the biggest spending nationality when on their travels and collectively spent $261bn whilst abroad in 2016, representing an increase of 12% on the previous year.
Visa restrictions on Chinese nationals visiting the UK have historically kept tourism levels relatively low, however these policies have been relaxed and there is now an increasingly strong demand for outbound travel. There is also an expanding network of international direct flights from China, which Colliers International says is helping to boost overseas retail spend.
But according to the firm, the UK was the front-runner for tax free shopping during the Chinese New Year at the beginning of 2017, with the weaker pound against the yuan helping to further motivate spending. Year-on-year Chinese sales increased by more than 96% for January/February; there were 54% more Chinese transactions and average spend of Chinese tourists increased by 28%.
Souber added: “With a population-in-motion of more than one billion people, some commentators are now referring to the travel sector as the world’s ‘sixth continent’. It certainly is a burgeoning specialist retail property sector that must be factored into the plans of any brand that is looking to establish an international profile.
“With UK-EU changes in March 2019, duty free is only going to make the retail offering in travel hubs an even bigger business when it returns. Not only will there be an influx of jobs and retail transactions but we will also see more retailers looking to take extra sites or larger units.
“There is close to 500,000 sq ft of retail space across the Heathrow terminals which makes the airport a shopping centre in its own right. St Pancras station which is both a commuter hub and the Eurostar terminal has a tremendous retail and food & drink offer.
“Calvin Klein, Chanel, Fortnum & Mason, John Lewis, LK Bennett, Oliver Bonas and kikki.K are among the brands represented and there are great places to eat and drink which include one of the best Sourced Market outlets in London and also the famous St Pancras champagne bar.
“There are hardly any of the original shops that were in the Eurostar terminal when it opened a decade ago. That is because the offer has been enhanced to meet the needs of an increasingly demanding and affluent shopper base.
“Of course, as with all decisions to take a physical store, it is absolutely essential that the retail offer is compatible with the environment. However, the relevant shopper dwell time – at airports in particular – is now considerable due to the demands of security, so there are increasing opportunities for retailers to exploit the flow of passengers.”