Changi Airport Group (CAG) has reported a +2.1% increase in retail sales to at least S$2.86 billion/$2.065 billion in the 2019 calendar year, TRBusiness can exclusively reveal.
Last year’s retail performance enables Singapore Changi Airport to retain second place among this year’s Top 10 Airports, ranked by total DF&TR sales for 2019, as determined by TRBusiness.
Singapore Changi, which handled 68.3 million passengers in 2019, remains behind Seoul Incheon and marginally ahead of third-placed Dubai in the rankings. Each airport will be profiled and ranked as part of a comprehensive report which will appear in the August edition of this publication.
CAG cited perfumes & cosmetics, liquor & tobacco and luxury goods as the top-selling product categories at Singapore Changi Airport last year, whilst revealing that Chinese, Singaporeans and Indonesians were the highest spending shoppers.
The awarding of the core category liquor and tobacco concession to Korean retailer Lotte Duty Free was among the main retail developments for CAG in 2019.
DFS Group had held the contract since 1980 and forged a strong partnership with airport operator Changi Airport Group, so to say the contract award resembled a changing of the guard would not be an exaggeration.
The circumstances leading to the award were also unusual. DFS agreed a two-year contract extension in 2018, but ultimately went back on the agreement. In May 2019, the retailer agreed a two-month contract extension with CAG, which expired on 8 June 2020.
Many expected DFS to participate in the tender for the 18-store concession it had held for so many years, perhaps in the hope of negotiating more favourable terms, but it wasn’t to be.
On 24 October 2019 it was announced that Lotte would operate the four-terminal L&T concession, spanning more than 8,000sq m of retail space.
A Changi Airport Group Spokesperson told TRBusiness: “This was the first time we awarded a new operator this key concession at Changi. In June 2020, we welcomed Lotte, which started retailing on our iShopChangi.com e-commerce duty free platform.
“It’s physical stores, which will open at a later date, will offer over 3,000 tax and duty free wines and spirits.”
The opening of Jewel Changi Airport (Jewel) in April 2019 was another major retail development for CAG.
The 10-storey, 135,700sq m Jewel, boasting more than 280 shops was officially inaugurated on 18 October 2019 by Singapore Prime Minister Lee Hsien Loong. Doors were initially opened to the public in April.
The Spokesperson commented: “Last year, Changi changed perceptions of what an airport could be, with the opening of Jewel garnering international interest and attention.
“Envisioned as a marketplace and urban park, Jewel features play attractions and airport facilities such as early check-in counters and kiosks. All of this is in addition to its towering Rain Vortex and lush Forest Valley.”
Jewel attracted around 50 million visitors in its first six months of operations and CAG is looking forward to welcoming them back as travel resumes. “With a wide selection of retail and F&B outlets, we believe Jewel’s world class tenant mix appeals to local and international visitors.”
In terms of this year, retaining its title of world’s best airport, as voted for by SkyTrax, is one positive for CAG during a challenging period as a result of the coronavirus (Covid-19) pandemic.
“We are humbled to be named Best Airport by Skytrax for the eighth consecutive year. The affirmation pushes us to continue pursuing new innovative retail experiences and offerings,” the Spokesperson remarked.
With more than 80% of retail and food and beverage outlets at Changi Airport and Jewel restarting operations as of 3 July 2020, things appear to be looking up.
As CAG prepares for the gradual resumption of flights, it is adapting its retail strategy accordingly.
This is shaped by a S$112m/$81m Aviation Assistance Package which has been provided for the airport community by the Singapore government, Civil Aviation Authority of Singapore and CAG.
The amount includes a 15% property tax rebate, which CAG received from the government and passed on to the aviation community.
“We also offered our concessionaires in the transit and public areas a 50% rebate on their monthly basic rental for a period of six months from February 2020,” the Spokesperson emphasised. “This is in addition to an automatic rental offset tied to passenger movements at Changi Airport, which our concessionaires receive as part of their tenancy agreements.”
On 29 June 2020, Singapore Airlines and SilkAir customers were granted permission to transit through Changi from destinations such as Frankfurt and London (Heathrow) to any destination operated by Singapore Airlines, SilkAir or Scoot .
Passengers can also transit at the airport from points in Australia, China and Japan. The move was part of CAG’s strategy to gradually re-open air transport.
CAG has been working with national agencies to ensure transit passengers enjoy a safe and positive airport experience, despite travel restrictions. The Spokesperson explained: “CAG has set up Transit Holding Areas (THAs) in Terminals 1 and 3 where passengers can wait comfortably for their next flight.”
The airport operator has also brought vending machines to the THAs, in addition to comfortable seating, free Wi-Fi and entertainment zones. The vending machines give passengers the opportunity to purchase light meals, snacks and drinks.
SPECIAL DELIVERY SERVICE
In addition, CAG has worked with tenants to bring on-site kiosks for passengers to purchase snacks and food items such as chocolates, salted egg snacks and other local delights.
“As an added service, we have also introduced a special delivery service. This allows passengers to order food, including halal options from selected airport food and beverage outlets.”
Safety measures and safe distancing, along with stringent cleaning and disinfecting regimes have been implemented across all retail and food and beverage establishments at the airport to give shoppers and diners peace of mind.
“High contact areas are sanitised at Changi, along with fitting rooms after every use. Acrylic screens are also placed at counters and manned by staff to provide a safer barrier between travellers and staff,” said the Spokesperson, who added that temperatures are taken at designed entry points.
Contactless solutions have been introduced to create ‘a safer’ yet seamless airport journey for passengers. New proximity sensors, for example, are being installed at Changi’s automated kiosks for check-in and bag-drop, eliminating the need to touch electronic screens.
At immigration, auto-clearance lanes have been upgraded with a new biometric system using face and iris recognition technology. This replaces traditional fingerprint-scanning.
“Autonomous cleaning robots have been upgraded to spray a light disinfecting mist for added protection on carpets and floors during cleaning.
“We are also testing the use of ultraviolet-C LEDs to disinfect the handrails of escalators and travellators safely.”
With Covid-19 severely impacting global air travel and retail, CAG has enhanced its iShopChangi.com platform. The airport operator has worked closely with tenants to extend their tax free offerings to non-travellers and tap opportunities in the domestic market.
“The platform now features more than 5,000 products from top brands across beauty, electronics, fashion and lifestyle products for non-travellers,” the Spokesperson concluded.
Asia & Pacific,