According to Sydney Airport Corporation Ltd (SACL) General Manager Commercial Derek Larsen, one of the main challenges this year has been delivering the new T1 retail development on time, while maintaining sales in the existing

facility – ahead of opening one of the biggest duty free airport shops in the world.

In a recent interview with TREND, Larsen said he was pleased this has been achieved to date amidst SACL's A$500m ($354m) T1 upgrade and expansion that will incorporate its brand new shopping concept called 'The Forum'.

Larsen explained that while the upgrade has been well publicised, the actual significance of the new development to SACL should not be underestimated.

‘It is the first major development and expansion since 2000, prior to the Olympics in Sydney. It provides a centralised customer processing and immigration point and a major enhancement to the retail offer, including one of the largest duty free stores in the world.

‘It will provide a wonderful experience both to those arriving and departing and it will reinforce the meaning of friendliness and Australian hospitality that we are so renowned for and confirm Sydney Airport as not only the 'gateway' to Australia, but also a truly global city.’

Larsen says it is not 'just a new bunch of stores' but more 'a whole new way of doing business' and a more engaging retail experience for the customer.

He said: ‘It will have a greater emphasis on customer centricity and not just passenger facilitation and processing.’

Larsen said that passenger spend rates (PSR) have continued to show excellent growth for calendar year 2008 and for the first quarter of 2009, being up 8% and 9% respectively across T1.

Having said that, overall sales have been impacted due to a decline in overall numbers, but he remains very upbeat and he talks in encouraging fashion: ‘Difficult times provide great partnership opportunities and it is only by all stakeholders working together for mutual benefit that we can really deliver maximum performance.

‘An element of complacency creeps in the good times, we take the view that we really don't have to work at it. A captive market mentality. Strong ongoing collaboration between the retailer and SACL have ensured that both penetration and average transaction value continue to grow.’

[A major interview with Derek Larsen covering many more aspects of Sydney Airport's travel retail business – including his views on the strong performance of duty free concessionaire Nuance – appears in the current edition of the Travel Retail Business].