Dufry is readying hybrid retail and F&B concepts for Spain.
DufryFollowing Spanish airport operator Aena eventually awarding Dufry the retail concessions of Catalonia and Madrid—after no bids were initially received—the Swiss travel retailer says that the total space awarded in Spain represents an additional 30% compared to its presence before the $19 billion bidding round began.
In total, Dufry won five of the six lots available: Andalusia-Mediterranean, the Balearic Islands, the Canary Islands, Catalonia, and Madrid. The Northern Airports lot—which includes airports in Galicia, Asturias, Cantabria and the Basque Country—were snapped up by Lagardère Travel Retail, allowing the French company to make its debut in Spain with duty-free shops. The retailer already has fashion and news stores in the country’s airports.
Dufry says that it did not bid for the Northern Airports lot and “won all bids tendered for in Spain,” all under new 12-year contracts. Its new Spanish estate now includes 21 airports and 120 outlets covering around 646,000 square feet. Those airports served more than 130 million travelers in 2019.
Spain is a crucial market for Dufry as it is a big revenue generator due to the country being the third-most popular global destination for incoming tourists. According to global seat analyst ForwardKeys, based in Valencia, Spain, both Barcelona and Madrid are among the top 10 most searched for cities for global travel this summer (in fifth and ninth places), despite dangerous heatwaves hitting parts of the Mediterranean including Spain.
Dufry argues that its wins in all the lots that it bid for confirms its global leadership in the travel retail channel. However, bids are largely driven by the financial outlay that retailers are willing to put down—as well as technical and design proposals—and several retail operators walked away from lots rather than bid high, such as Gebr. Heinemann.
Not everything was retained Dufry’s CEO, Xavier Rossinyol said in a statement: “We see this award, where we retain nearly all our operations, as a confirmation of the potential offered by our newly combined business and our exciting strategy to create a travel experience revolution.” He added that the company’s strategy, called Destination 2027, will be brought to life in Spain through a more consumer-centric approach to retail with digital engagement high on the priority list.
Following its merger with travel food player, Autogrill, Dufry plans to combine travel retail with food and beverage (F&B) which Rossinyol says will “generate value for our customers, for our concession partner Aena, for our brand partners and suppliers, and for Dufry.”
Almost a third more space The new contracts will be accretive to Dufry’s profitability and cash flow, according to the world’s biggest airport retailer, in line with its business development strategy. Helping with that is the addition of 30% more space in Spain, despite losing one lot of airports. Rossinyol said: “The number of new categories granted and the new spaces to operate F&B within retail, allows us to give a key push to our new hybrid concepts.”
Dufry has also kept Canresa onside. The company, led by CEO Luis Suárez, has a longstanding collaboration with the Swiss travel retailer over several decades in the Canary Islands. There, the airports of Gran Canaria and Tenerife South were among the seven busiest in Spain in 2019 and vital for duty-free and travel retail sales.
As Dufry renovates its stores in Spain, it is now preparing new hybrid offerings, combining retail and F&B. The company says it will delivering a strong sense of place, tapping the history, culture and tradition of the cities where each airport is located. Collaborating with renowned chefs and opening new gourmet bars will be one approach.
Later this year, a new company name and visual identity for the merged Dufry and Autogrill entities will be revealed.