Fast facts about Retail
Sydney Airport leases 236 retail outlets, and licenses advertising rights in and around our terminals. Retail tenant activities include the sale of duty free products, food and beverage, news and gifts, fashion and currency exchange services. Sydney Airport has an extensive network of digital and static advertising sites in terminals, beside access roads and at car parks, leased to advertising agencies under a single contract. Income is supported by a strong level of minimum guaranteed rent, which accounted for over 94% of revenue from retail activities in 2016.
Sydney Airport has repositioned its retail, food and dining offering during the year, with a focus on harnessing the best of global and local brands, as well as enhanced store design principles. Its first to Australia and first to airport brands are already delivering improved outcomes, with 12.1% revenue growth to $295.6 million in 2016.
Best of global and local brands
The year has seen the transformation of 68 stores at Sydney Airport, providing a more tailored mix of retail offers for passengers and visitors. At T1 International, our City View premium dining precinct opened in September. Sydney Airport welcomed The Bistro by Wolfgang Puck, alongside Australia’s first flagship Heineken House as part of the precinct. These premium dining options are reshaping the passengers’ airport dining experience.
Our new T1 dining options have complemented retail offerings by Gebr Heinemann Tax & Duty Free, introduced in 2015. The Sydney Airport store was awarded gold in the Interior Design Retail category at the Sydney Design Awards and Summit 2016, reflecting our leadership position in the design of the T1 retail precinct, and the improved offering now available to passengers.
A dedicated fashion precinct was also launched at T1, introducing a range of luxury brands including Tiffany & Co. and Burberry, with Gucci to open in the first quarter of 2017. The fashion precinct has redefined the product offering to increase passenger spend.
Revenue contribution to the Group
T2 Domestic transformation
Our revitalised T2 casual dining precinct was also revealed in 2016, providing new first to Australia and first to airport brands for our domestic travellers. The upgrade featured the introduction of healthy dining options for passengers and visitors, increased seating capacity, and improved amenities and connectivity.
Global Exchange was named as Sydney Airport’s new foreign exchange provider in October, with 21 bureaux located across our International terminal. Sydney Airport was the first Asia Pacific airport to partner with Global Exchange, which provides passengers with the option to order their currency online, before they arrive at the airport. Global Exchange’s customer focus supports Sydney Airport’s strategy to enhance the passenger experience, and provide a more tailored service offering to our passengers.
Our technology strategy saw the introduction of new, innovative digital advertising screens in 2016 as part of our advertising contract with APN Outdoor. The modern and bright high resolution digital screens supported our terminal improvements, while enhancing the advertising offering across our terminals. This included new digital screens at the T1 Marketplace, T1 airside arrivals and T2 arrivals. The new screens form part of a strategy to reduce signage and clutter, and position advertising in more appropriate locations to maximise advertising returns. This led to a reduction in the amount of advertising by 95 signs, while increasing advertising revenue and enhancing the airport experience.
Extending our marketing reach
Our retail marketing focus extended beyond the airport this year, with strong pre-engagement with the passenger on our new retail offering. Our marketing strategy is helping visitors to better plan their time at the airport to maximise dwell time in the retail precinct.
In particular, we established a stronger marketing presence in China to target this growing market. In 2016 we became the only Australian airport to establish a dedicated website hosted in Shanghai to outline key facts and useful information about Sydney Airport. The site, supported by a search engine optimisation strategy focused on leveraging searches related to Sydney, is driving local traffic to our page to help Chinese passengers plan their journey. This was complemented by a dedicated WeChat page, and extends the reach of our China ready strategy to the very start of the passenger journey.
In 2017, we’ll continue to deliver an integrated strategy to drive growth across our terminals. New outlets launched in 2016 will transition to regular trading patterns, providing consistent rental returns for the retail business. In 2017, we’ll build on the significant works already completed at T1 as we introduce new specialty retail stores at Pier C. It’s expected these works will be completed by mid-2017.
We’ll also work to further develop our T2 retail precincts, including the refurbishment and expansion of T2’s Pier B.