Airport retailers feeling impact of fewer fliers

By Mike Crissey
Associated Press

PITTSBURGH — Getting people to fly is hard enough these days. Getting them to buy at the airport, too, isn't any easier.

Lloyd Sobel of Denver says the only things he looks for at the airport are coffee or Coke and an outlet for his laptop computer. Associated Press

Sparsely populated airport terminals are not only a reflection of tough times for the nation's airlines. They spell big trouble for the airport boutiques, newsstands and restaurants that are heavily dependent on travelers' impulse purchases.

"We're dependent on foot traffic here in a captive environment, an airport: If they are not coming in, they are not coming in," said Bill Newlin, who owns three Seattle's Best coffee stands and two Ben & Jerry's stores at Pittsburgh's airport.

Mirroring the decline in sales at Pittsburgh International, Newlin said his business is down 15 percent from last year. At Hartsfield International in Atlanta, retail is down 12 percent since the war began — the third-largest decline in airport history, officials said.

At Boston's Logan Airport, some retailers say business was off 5 percent last month.

Hawai'i airports also have reported problems, with concessionaires — notably duty-free retailer DFS Group — locked in disputes with the state over payment of back rent and citing dwindling sales.

In places where there is growth, it is smaller than before. The Hudson Group, which runs 250 newsstands and specialty stores at 35 airports, said sales are up 3 percent this year, compared with 10 percent growth last year.

"It is a real science to operate at an airport," said Pauline Armbrust, editor of the Airport Revenue News. "The person in an airport is there to travel, to go from Point A to Point B. They aren't there to shop."

Airport retail has come a long way since the days when there might be no more than a newsstand and a sandwich shop.

Pittsburgh was among the first to expand in 1992, adding eateries such as TGI Friday's and Au Bon Pain, clothing stores such as the Gap and Victoria's Secret and specialty stores such as pen-maker Montblanc and Wilson's Leather.

Since then, airports including Denver and Detroit have included mall-like areas in expansion plans. Others have squeezed in stores wherever they can find space.

Excluding duty-free stores, travelers spent $2.8 billion at the nation's 50 airports with the highest sales per passenger in 2001, the first year the figure was counted, the Airport Revenue News said. The numbers for 2002 have not been reported, but based on anecdotal evidence, it is expected to decline.

Last year, 473 million people flew domestically, a 12 percent drop from 2000, according to the Air Transport Association. As of February of this year, 68 million people had flown domestically, down 13 percent from the first two months of 2001.

The languishing economy and fears of terrorism have hurt travel, as have the financial troubles of airlines. Add to that the war with Iraq and a contagious and potentially fatal illness, SARS, or severe acute respiratory syndrome, which have made even more people avoid travel caused some airlines to cut flights and jobs.

Analysts say larger companies with stores in several airports have fared better than their smaller counterparts because declines in some places are offset by increases at others.

Los Angeles International Airport also has fared well, said spokeswoman Nancy Castles, because travelers who are worried it will take longer to get on a plane are showing up earlier — and shopping. Retail and duty-free sales were up 14 percent in the final three months of 2002 compared with the same period in 2000, she said.

However, the war and fears about SARS were expected to cut into March sales, she said.