San Francisco International Airport (SFO) management formally confirmed yesterday that the airport will be issuing an request for proposals for its duty free contract ‘early next year’ ahead of the expiry of DFS Group’s lease on December 31 2017.

 

This contract is currently held by DFS Group in the International Terminal, where it manages nearly 58,000sq ft of concession space across a broad spectrum of luxury brands and products – including beauty and fragrances, and watches and jewellery.

 

FORMAL CONFIRMATION TO TRBUSINESS…

Commenting to TRBusiness on the revised timetable for the release of this RFP, which had been anticipated this year, Communications and Marketing officer Doug Yakel said: “The current duty-free lease at SFO expires on December 31, 2017. We are planning to issue an RFP early next year.”

 

 

DFS GENERATED GROSS SALES OF $116.5M

Meanwhile, In SFO’s fiscal year 2014-15, DFS generated duty free gross sales of $116,580,411 over 35,955sq ft of duty free space, while SFO’s sales per enplaned (departing) passenger as a whole were measured at $13.68 for both retail and food and beverage over the same fiscal period.

 

Revenues from duty free sales increased by $2.8m (9.9%) from higher international passenger traffic and an increased level of marketing and promotional activity by DFS. The retailer also experienced an increase in gross sales of 4.4% compared to the prior year. Total concession sales from ‘all businesses at SFO’ during this period reached $144.8m.

 

Drawing on more recent figures, international passenger numbers totalled 1,263,573 in July 2016 (+10.9%) while calendar year January to the end of July recorded 7,042,740 (+9.2%) international departures and arrivals. (In fiscal year 2014 to 2015 SFO handled 10,631,812 departing and arriving passengers).

 

 

The impending RFP follows the last major upgrade of the SFO offer by DFS back in September 2014 when it unveiled a comprehensive upgrade of its SFO duty free offer.

 

Major improvements made at that time formed part of DFS Group’s overall 18-month long $50m investment in its North American operations, which also included a $25m upgrade and rebranding at Los Angeles’ New Tom Bradley International Terminal in 2013 – plus renovations at New York JFK.