The Trinity Forum: Lagardère Travel Retail
Painting a positive picture of travel retail’s future
The evolving travelling consumer landscape, consolidation and the convergence of sales channels were among the themes addressed by Lagardère Travel Retail Chairman & CEO Dag Rasmussen in a presentation and Q&A session with Dermot Davitt on day two at Trinity.
Asked about the key trends the retailer is seeing from the consumer, Rasmussen replied: “The consumers are evolving, they are often younger, looking for more authenticity, more experience, more openness. They are focused on their health, on what they eat; they want more uniqueness or exclusivity, and they really value the omnichannel experience.
“These are the needs we have to satisfy. In duty free, 30% of our products are local products. Sense of Place is not just words to us, it is a category, it gives each of our airport locations a distinctive offer.
“With the help of our brands we are looking at how products can be personalised to the consumer, in every particular airport environment. That’s deeply rooted in our business now.”
On the subject of consolidation in the travel retail industry, the convergence of retail and F&B among major players and the importance of scale going forward, Rasmussen said: “I don’t think scale is the main issue. The main issue is integration. It’s good integration of the companies [involved in the acquisition process]. So that means we don’t only look at the business [being targeted], we look at the vision.
Dag Rasmussen: The master concession model has the potential to maximise operational and commercial value
“It is a partnership, and so the due diligence is not only on the figures and on the contracts. It’s also about how we can integrate the teams and the concepts into our vision.”
Rasmussen was asked about the master concessionaire model, which is becoming a notable trend in airport retail of F&B, and whether the alternative of multiple contract holders offers greater competition and potentially more benefit to the airport.
“For me, competition should be at the time of the tender. It’s not about travel essentials competing with food or with duty free. It’s about how we deliver the best experience for the passenger,” he said, suggesting that the single voice which comes with the master concessionaire model is the best way to achieve that.
He continued: “If we have everything [travel essentials, duty free and F&B] and the airport is not satisfied with what we are delivering we are not against having clauses in the contract that address that. If that is the case, we should have warning; we should be able to correct ourselves. If things then don’t improve they [the airports] can change [the provider].”
Earlier, on the same subject during his presentation, Rasmussen said: “We firmly believe the master concession model has enormous potential to maximise operational and commercial value creating seamless and enjoyable shopping experiences.”
Rasmussen’s compelling address – in which he outlined key elements of the company’s strategy and its strong focus on sustainability – emphasised how strongly Lagardère Travel Retail is currently performing in the airport space.
Rasmussen questioned data points taken from management consulting firm Kearney’s recent report conducted for the Tax Free World Association, Travel retail faces its moment of truth: strategies to reinvigorate the marketplace. Its findings pointed to a decline in travel retail spending.
Rasmussen said: “I tend to perceive things very differently. Contrary to what the report states, I believe we, and our competitors, are witnessing a surge in spend per passenger.”
“Our duty free spend per passenger is up by high single digit percentage compared to 2019 and 2023 is set to be our best year ever,” he added. “We’re not just catching up, we’re soaring past 2019. These are hard facts. And we anticipate this growth will continue thanks to increased global mobility.”
He added: “But I recognise there are also challenges. For example, the uncertain geopolitical and macroeconomic environment with looming impact on consumer spending, climate change with the regulatory pressure on the air industry, the erosion of the duty free price advantage and increased regulatory scrutiny putting pressure on some categories.
“But I am confident that everyone here [at the Trinity Forum] and in the industry is working hard to mitigate these risks and innovating to meet consumer expectations. I know we [at Lagardère Travel Retail] are, it’s a top priority.
“We are embracing the entire consumer journey through duty free, travel essentials and dining. Not from a perspective that sees more challenges, but one that sees more opportunities, sees not setbacks but stepping stones and certainly not a downturn but a steady climb into the future of retailing and dining.”
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The Moodie Davitt eZine
Issue 329 | 22 November 2023
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