Hunter: ‘Treat MAG as the safety net, not the norm’

By Luke Barras-hill |

KeithHunter-hero-Cannes-Luke

Keith Hunter, Co-founder, Hunter Palmer Global Retail Solutions (left) speaks to TRBusiness’s Luke Barras-Hill.

Airports should treat the minimum annual guarantee concession model as a safety measure and not something that should be relied on, according to Hunter Palmer Global Retail Solutions’ Partner Keith Hunter [see below video].

In an in-depth interview with TRBusiness, Hunter also makes clear that airports should be taking the lead in ensuring concession arrangements with partners are optimised to deliver the world-class brand and retail experience expected by today’s traveller.

“Most of the people we’ve spoken to initially treat it [MAG] with scepticism, but from my background – and where I was previously – we proved that it can work by being a bit more flexible. MAG is probably not going to go anywhere, but should be treated as a safety net, rather than something that is relied on as the norm. If your retailers are trading at MAG, there is a huge problem.

“The idea is to facilitate opportunities, allow all stakeholders to provide a service primarily to the customer, but also make money as a result; we’re all in it to make turnover, however the airport has to be chasing a valid, relevant and hopefully world-class customer experience.

“When a MAG is imposed it should be done with a view to ‘is this workable? Does it provide too many constraints on the retailer? Will it allow them to be more adventurous or experimental with their offer? Will it also allow new brands to come in – particularly if you are a big operator?’.”

HUNTER PALMER TO THE FORE

Founded by experienced international commercial executive Nick Goddard-Palmer and former Senior Vice President of Qatar Duty Free Keith Hunter, Hunter Palmer Global Retail Solutions draws on more than 25 years’ experience to help airport operators, landlords, investors, retailers, brands and other stakeholders to leverage commercial best-value or strategic positioning in a challenging airport environment.

During the extended interview, Hunter speaks in detail about Hunter Palmer Global Retail Solutions’ development since the specialist retail consultancy began a little under one-and-a-half-years ago.

The formation of the company, Hunter says, addresses what the Founders see as a void in the knowledge base or ability that exists in today’s evolving travel retail marketplace.

Commenting on the landscape as he sees it, he says some landlords are content with their current commercial models and are seeking to optimise operations in line with concession fee expectations, whereas others are open to being more flexible, experimental and adventurous in their arrangements

AIRPORT ACCOUNTABLITY

Addressing the long-running contention from some quarters that the airport business is ‘broken’, with claims too little is paid and too much is expected on the retailer and landlord sides, respectively, Hunter said: “We’d say the truth lies somewhere in the middle: There’s no denying that the airport should take the lead on this – it is their airport, their customer experience and they need to work more closely with operators and brands to allow them to create that surprise, delight and innovation that everyone is expecting.

“That is difficult if there are too many financial constraints. We’ve said, relook at those agreements and share some of that pain; when times are hard, the airport should be a little more relaxed or flexible with the operator but equally when times are good, perhaps that is an occasion when the retailers might pay slightly more for their space.

“Airports are the main facilitators of the relationships between all the stakeholders; airport management can help create a relationship between thePax-airport-HunterPalmer [retail] operators and the airlines and the operators and the other services and come up with new abilities to maximise revenue, but also improve service across the airport.”

Responding to an assertion made by BBC HARDTalk Presenter Stephen Sackur during the opening conference at last month’s TFWA Cannes that travel retailers are too ‘risk averse’ when it comes to investing in new brands, Hunter was direct.

“Absolutely and sometimes justifiably so – at times it is incredibly difficult to operate in a volatile airport environment and everything that happens can have an effect on the retail or food & beverage proposition. It could have a negative influence and has done in the past in certain locations.

“We’re [the industry] always being criticised for not providing something new, or replicating across the board and the larger you are the more in danger you are of replicating without tailoring to the exact opportunity in that particular location.”

Conversely, Hunter adds that a number of new brands attempting to break into the sector and create or establish partnerships with big operators and/or airports directly ‘are struggling to get an audience’ due to a focus on tough commercial demands.

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