Airport Retail Market Size, Share, Industry Analysis, By Airport Type (Domestic and International), By Product Type (Liquor and Tobacco, Perfumes and Cosmetics, Fashion and Accessories, Food and Beverages, and Others), By Ownership (Corporate Chains, Independent Owners, and Franchises), By Distribution Channel (Direct Retailer, Convenience Store, Specialty Retailer, and Departmental Store), and Regional Forecast, 2024-2032

The global airport retail market size was valued at USD 99.7 billion in 2023. The market is projected to grow from USD 102.9 billion in 2024 to USD 159.2 billion by 2032, exhibiting a CAGR of 5.6% during the forecast period. Key players in the market include Airport Retail Group LLC, China Duty Free Group Co. Ltd., DFS Group Ltd., and Dubai Duty Free, among others, which compete in the pricing and service provisions in the global market.

Airport retail is the sum total of all retail services and products offered within an airport terminal to enhance the convenience and shopping experience for travelers. This sector has a whole range of offerings, including duty-free shops, specialty stores, convenience outlets, and food & beverage establishments. This will help airport retail become one of the key contributors in improving the travel experience for passengers through increased product and service offerings suited to passenger needs while generating significant revenues for airports. The market is set for growth, driven by sustainability initiatives, technological advancements, increased purchasing power of individuals, and increasing number of projects for expansion of airport infrastructure in various regions.

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Market Dynamics

Market Drivers

Growth in Passenger Air Traffic and Better Airport Infrastructure to Lead to Substantial Market Growth

There has been an increase in airport retailing due to rising number of air travelers and advanced infrastructures in the airports. In fact, passenger traffic in the airports is anticipated to double globally by 2035, hence, a lot of money is being spent on the modernization and expansion works to provide better shopping atmospheres that respond to diverse customer needs.

For instance, stand-alone free shops that opened recently in the autonomous shopping outlets at the Hong Kong International Airport show the way advanced infrastructure has transformed the experience of visiting a shop with access to other products. The increased number of tourists, combined with improved airport facilities, attract more customers and prompt higher spends, making airport retail a vital component of the general travel experience and economic growth of the sector.

Market Restraint

High Operating Cost and Competition From E-Commerce  to Restrain Market Growth

High operating costs and competition from e-commerce are the two biggest growth inhibitors of airport retail. Running a retail shop in an airport is quite expensive as it involves paying rent and salaries to staff and handling logistics expenses. These costs lower profit margins, especially for smaller retailers. The competitive environment is also intensifying, with many successful brands occupying better retail spaces, leaving little room for smaller or newer players to be seen or received by customers. Simultaneously, e-commerce directly threatens the traditional airport retail model. Customers are more likely to shop online for goods to consider buying at destinations, eliminating the impulse purchases that have traditionally characterized airport shopping.

Market Opportunities

Increased Spending Power of Travelers and Omnichannel Retail Strategies to Offer Market Expansion Opportunity

Increased spending power of travelers and the adoption of omnichannel strategies in airports have become huge avenues for growth. With their disposable incomes increasing, even in developing markets, it is expected that more customers will be willing to shell out more money on products and experiences available at an airport. At the same time, omnichannel retailing strategies, where buyers can seamlessly switch between online and offline distribution channels and shop, are enhancing the customer shopping experience.

For instance, omnichannel shoppers are said to spend double compared to store-only buyers; this means more revenue due to digital engagement. Airports have resorted to technology to ensure a much better shopping experience; an example of this is mobile apps offering instant information about the offer as well as its availability.

Market Challenge

Economic Volatility and International Currency Rate Fluctuations to Challenge Market Development

Economic instability and fluctuation in international currency rates are some of the major challenges to the airport retail market growth. Economic uncertainty reduces consumer spending since the tourists are likely to spend less on discretionary goods and services at the airport. For instance, during an uncertain time, discretionary expenditure decreases, thereby affecting sales of non-essential items in airports. Another factor is fluctuations in currency rates, which affects the prices of goods sold in duty-free shops. If a traveler's local currency is weak against that of the country they are visiting, it will become expensive to buy goods; thus, they will shy away from spending at retail outlets in airports. Apart from this, economic issues may also lead to inconsistent flow of passengers. For example, when a country is experiencing economic downturns and/or political instability, such trends might reduce travel in the international arena, which may further decrease footfall at airports and consequently decrease the retail sales.

Global Airport Retail Market Trends

Growth in Digital and Immersive Retail Experience to Act as Major Market Trends

Digital and immersive passenger experiences are significant technological trends driving growth in the airport retail market. Advanced technologies adopted by airports provide engaging and interactive shopping environments that enhance the passenger experience. Virtual storefronts, augmented reality applications, and interactive displays are making shopping fun as opposed to being a necessity. Through these technologies, travelers can discover products with real-time information about deals and product availability, thereby offering seamless transactions and a well-tailored shopping experience through innovations, such as mobile applications and digital signage. This digitization process, in particular, tends to attract the attention of younger, tech-inclined travelers who look for comprehensive cross-channel shopping options.

Impact of COVID-19

The COVID-19 pandemic brought a substantial shift in consumer behavior and several difficulties, thus impacting the airport retailing market growth. Passenger traffic fell steeply with restrictions on travel, closure of borders, and quarantine measures. Thus, airport retail sales fell sharply. This decline was apparent, especially in the duty-free sales. When international travels came to a grinding halt, weaker demand for liquor, tobacco, and other luxury goods was observed.

However, with airports opening up, the market is expected to recover. Still, this recovery is clouded by present-day uncertainty; most travelers are not keen on contacting the physical retail stores and instead order online or opt for pick-up at arrival. Therefore, digital and omnichannel retailing becomes important as retailers have to employ technologies that encompass mobile applications and augmented reality to create safer and more engaging ways of shopping.

Segmentation Analysis

By Airport Type

Growth in Personal Disposable Income Propelled Domestic Airport Segment Growth

On the basis of airport type, the market has been divided into domestic and international.

The domestic segment accounted for the largest market share in 2023. Many domestic airports are investing in modernizing and expanding their retail spaces. This includes improved infrastructure: large terminals with a wide variety of shopping and dining choices. Such an environment appeals to travelers. An expanded terminal allows passengers to stay and explore more and varied retailing and eating options. Recently due to modernization in airport retail, there has been a rise in demand for  premium design and service styles that facilitate the purchase of retail.

The international segment accounted for a significant market share in 2023 and it is also expected to record the highest CAGR during the forecast period. Duty-free shops are a crucial element of airport retailing because, as tax-free product selling outlets, they attract shoppers who have a penchant for bargaining for luxury goods. This aspect of shopping in airports is the most attractive for international travelers who can purchase goods at lower prices than they would pay for elsewhere which will drive sales in such outlets. The overall economic environment also supports growth for airport retailing. With economies around the world improving, people are having the discretion to spend money on shopping during travel. Moreover, the passenger traffic at airports is also increasing, which will boost retail activity due to the constant developments in the travel & tourism sector.

By Product Type

Increased Passenger Traffic to Drive Food & Beverages Segment Growth

Based on product type, the market is segmented into liquor & tobacco, perfumes and cosmetics, fashion & accessories, food & beverages, and others.

The food & beverages segment accounted for the largest market share in 2023. It is expected to register the highest CAGR during the forecast period. Growth in air travel increases the volume of passengers at airports. Expansion in the number of low-cost carriers and globalization has also increased disposable incomes, resulting in a larger customer base for F&B outlets at airport terminals. The greater the number of customers crossing the airport, the greater their demands for dining options and, therefore, expansion of F&B offerings that cater to diverse tastes and preferences. With the increased demand for premium dining experiences, travelers are increasingly making an investment in high-quality food and distinctive culinary experiences. To meet this changing preferences, upscale restaurants with gourmet food options have become part of airport offerings, targeting affluent travelers looking for special dining experiences.

The liquor & tobacco segment accounted for a substantial market share in 2023 and is expected to record a significant CAGR during the forecast period. Liquor and tobacco products sold in local airport shops are tax-free and duty-free, making them much cheaper to the travelers going through the airport. On top of that, those international passengers who want these items at lower prices after their return home will greatly appreciate this tax exemption while at the same time be encouraged to spend their unused foreign currency on duty-free products.

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By Ownership

Preference for Authentic Cultural Products Boosted Independent Owner Segment Growth

Based on ownership, the market is segmented into corporate chains, independent owners, and franchises.

The independent owners segment accounted for the largest market share in 2023. The growth in domestic air travel and low entry barrier for airport retail make it easier for the owners to set up their individual stalls. Additionally, numerous local stores in the city where the airport is located in offer retail products and services to passengers at arrival. Travelers look for differentiated and authentic products that can express the flavor and culture of the destination. Independent retailers usually have specialized niches, which big chains do not. Such diversity is what attracts consumers to seek memorable shopping experiences in their travel. Independent retailers might be capable of responding faster to changes in consumer demand than larger chains. They can adapt fast, according to trend or seasonal demands, local events, and respond to diversified needs of passengers at airports.

The franchise segment accounted for a significant market share in 2023 and is expected to record the fastest CAGR during the forecast period. Brand recognition will attract a traveler looking to shop from brands they have dealt with in the past. This will give them a sense of comfort and, most importantly, the brands will record more sales due to the passenger’s propensity to purchase from known brands at any given moment. The airport’s quality is enhanced due to quality assurance in such cases. Furthermore, the franchise operators usually arrive with a well-established business model and support system, which could lead to higher efficiency in operations. This can then enable the franchisee to manage the inventory perfectly with high-quality consistency across locations, thereby offering a reliable shopping experience to travelers.

By Distribution Channel

Growing Demand For Luxurious And Specialty Goods Fuel Market Growth Of Specialty Retailer Segment

Based on distribution channel, the market is divided into direct retailer, convenience store, specialty retailer, and departmental store.

The specialty retailer segment accounted for the dominating market share in 2023 and is expected to record the fastest CAGR during the forecast period. There is an upward trend of consumers seeking high-end products and experiences. In terms of travel, they are more likely to spend on high-quality specialty products, which makes retailers want to offer upscale products that reach affluent customers. This phenomenon is in accordance with the ever-increasing readiness of consumers to invest in unique shopping experiences while traveling. The growth of specialty retail at airports is motivated by factors, such as an increase in passenger traffic, unique demand for products, improvements in passenger experience, premiumization trends, captive audience dynamics, strategic investment in airport infrastructure, sustainability, and technological integration. Together, these factors add to the dynamic retail landscape, which is of value to both travelers and specialty retailers.

The convenience store segment is expected to record a significant CAGR over the forecast period. This store's purpose is to satisfy the traveler's immediate needs: snacks & drinks, personal care, travel accessories, and reading material. This enables them to provide easy access to a vast volume of stock that would otherwise be impossible to buy as they lack enough time before boarding. The demand for speed and convenience is on the rise as the fast pace of the travel world intensifies. Convenience stores provide a quick-serve value proposition that helps the traveler make their purchase with minimal wait time.

Global Airport Retail Market Regional Outlook

North America

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North America led the airport retail market share in 2023. There is a significant increase in air travel passenger volumes at North American airports. The additional passenger traffic can act as a greater customer base for retailers to capitalize on as they can have a high volume of potential buyers who are likely to have ample time to shop before their flight. High international air traffic entering and leaving the U.S. also contributes to this footfall at the same airports.

Asia Pacific

The Asia Pacific market is forecasted to achieve the highest growth rate in the coming years. The most important factors for the growth are a better lifestyle and higher income of the middle-class population. In countries, such as Australia, India, and China, there is a great scope for airport retail due to the augmented disposable income of the middle class. Airports will record higher sales on luxury or specialty merchandise due to greater spending with increased income. Still, duty-free shopping and tax-free international passenger luxury goods, cosmetics, wines, and other electronics remain an attraction among customers who want to purchase and avail the incentives. This is a huge sales area at airports as these are what most travelers are interested in while traveling.

Europe

The European market is forecasted to achieve a higher growth rate in the coming years. Huge investments are being made in the development and expansion of airport infrastructures. Most of the European airports engage in expansion and modernization programs, which include upgrading the retail areas of the terminals and establishing new ones. Improving the services in general enhances the customer experience as shops and restaurant facilities also offer more and varied places within the terminal.

Rest of the World

The rest of the world market is forecasted to achieve a higher growth rate in the coming years. Key developments in airplane terminal foundation, rising income, duty-free shopping, and urbanization will drive the development of air retail within the Middle East, Africa, and Latin America. The development is also due to changes in shopper behavior and innovations in airport infrastructure.

Competitive Landscape

Key Industry Players

The competitive landscape of the global airport retail market offers insights into various competitors. The companies such as SSP group, WH Smith and other players are actively involved in modernizing airport retail domain. These companies are focusing on North America and European based new airports and in coming years will be focusing on Asian new airports.

List of Key Companies Profiled In The Report

• SSP Group plc (U.K.)


• Flemingo International Ltd. (Sri Lanka)


• InMotion Entertainment (U.S.)


• WH Smith plc (U.K.)


• The Shilla Duty Free (Singapore)


• Autogrill S.p.A. (Italy)


• Airport Retail Group LLC (U.S.)


• China Duty Free Group Co. Ltd. (China)


• DFS Group Ltd. (France)


• Dubai Duty Free (UAE)

Key Industry Developments

• April 2024 - India's Mumbai Travel Retail Pvt. Ltd. (MTRPL) is expected to rebrand their stores worldwide. The rebranding pulls together the company's duty-free operations at seven airplane terminals in India and will make it less demanding to offered for contracts all inclusive. The rebrand coordinating all of MTRPL's air terminal duty-free businesses driven by Mumbai, the company's lead area with a developing notoriety for whisky retailing.


• November 2023 - Lagardère Travel Retail, through its subsidiary Lagardère Capital with Abu Dhabi Capital Bunch, became one of the biggest concessionnaires within the unused Terminal A with the opening of 12 duty-free and 6 nourishment and refreshment outlets at the Abu Dhabi Universal Air terminal. Another retail unit and eatery were due to open in mid-2024.


• November 2023 - Chalhoub Group launched “The Visitor”, a travel retail concept brand to begin with the area at the King Abdulaziz International Airport in Jeddah, Saudi Arabia. This launch marked the Group's first flagship within the travel retail landscape in the Kingdom. “The Visitor” is expected to offer a rich shopping experience for the tens of millions of travelers who pass through the airport each year.


• August 2023 – The Dubai International Airport announced that its passenger traffic post-pandemic had surpassed pre pandemic records. The first half of 2023 recorded 41.6 million passengers and comparatively grew 100% more than the pre-pandemic traffic.


• July 2023 – The Dubai International Airport announced the landing of the first Air Canada flight at DXB Dubai terminal 3. Air Canada is the fourth major international airline to operate out of the terminal.


• March 2023 - Adani Group unveiled its plan to focus on the expansion of the aviation business by bidding for more government-owned airports that are up for privatization.


• December 2022 - Adani Group launched a mobile application for airports for both android and iOS users. The software is supposed to help users book flights, cabs, and hotels. The application also has loyalty programs and loyalty points which can be redeemed for car booking and duty-free shopping.

Report Coverage

The report analyzes the market in depth and highlights crucial aspects, such as prominent companies, market segmentation, competitive landscape, airport types, and technology adoption. Besides this, it provides insights into the market trends and highlights significant industry developments. In addition to the aspects mentioned earlier, the report encompasses several factors contributing to the market's growth over the years.

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Report Scope & Segmentation