Airport Retail Market Size, Share & Industry Analysis, By Product (Liquor and Tobacco, Perfumes and Cosmetics, Fashion and Accessories, Food and Beverages, and Others), By Airport Size (Large Airport, Medium Airport, and Small Airport), By Distribution Channel (Direct Retailers, Specialty Retailers, Department Stores, and Others), and Regional Forecast, 2024-2032

Airport retailing refers to the sale of goods and services via the availability of various shopping centers, dining, and other service facilities within the airport terminals in order to provide greater convenience to travelers. These goods can include and not limited to luxury items, duty-free goods, gadgets, perfumes & cosmetics, fashion & accessories, in addition to a range of facilities such as food and beverages, lounges, entertainment venues, currency exchange, travel agencies, car rentals, among others.

Airport retailing delivers a wider variety of merchandise and caters to travelers' needs, often targeting high-income consumers and frequent flyers. The sector has grown tremendously in recent years as airports aim to enhance the passenger experience and increase non-aeronautical revenue. Multiple factors, such as a rise in tourism, increasing consumer disposable income enabling higher spending power, and duty-free shopping, are leading the growth of the airport retailing market. Moreover, the growth of travel retail brands, innovative retailing concepts, shifting consumer preference seeking value and convenience, and growth of low-cost carriers offering lower fares are a few other aspects triggering market expansion.

The global airport retail market growth is further driven by an increase in the number of air travelers owing to rising affluence, globalization, and improved airport infrastructure, which has offered airport shops a broader consumer base. Several airports have been undergoing extensive renovations and expansion, leading to the creation of more modern, larger terminals with improved retail spaces. For instance, The U.S. Travel Association is anticipating exponential growth in air travel that will not only outstrip pre-pandemic levels from 2019 but also may become the most significant demand the U.S. has ever experienced and as part of the Biden Administration's Bipartisan Infrastructure Law, passed in November 2021, USD 15 billion for airport infrastructure funding, which will include terminal expansion, retail space expansion, and overall better passenger experience.

The abrupt outburst of the COVID-19 pandemic affected the global airport retail market in 2020 and 2021. Multiple countries' governments imposed travel restrictions and nationwide lockdowns that caused a sharp decline in the revenue generated by the airport retail market. According to the Central and Eastern European Travel Retail Association (CEETRA) report, airports lost more than 88% of their passenger in 2020 and 2021, with an increasing number of airports grounding their fleets while some retailers had to shut their businesses as they were left with little to no customers. The ancillary travel retail and duty-free industry also suffered massively from the impact of the coronavirus.

Segmentation

Key Insights

The report includes the following essential insights:

• Parent/related market overview


• SWOT analysis


• Porter’s Five Forces Analysis


• Supply Chain Analysis


• Recent Technological Advancements

Analysis by Product

The market is segmented into liquor and tobacco, perfumes and cosmetics, fashion and accessories, food and beverages, and others based on the product. The perfumes and cosmetics segment is expected to hold the largest market share during the forecast period. Consumers are keen on purchasing duty-free products, and perfumes and cosmetics are often more reasonably priced duty-free than they would be in regular retail stores due to tax exemptions. This factor makes it an appealing option for travelers, thereby contributing to the segment’s growth. Consumers often seek to economize on high-end skincare products, makeup, fragrances, and other beauty essentials by duty-free shopping at airports. Airports serve as hubs for international travel and provide a unique shopping environment to visitors from all around the world. Travelers have both time and inclination to browse and purchase luxury items, including perfumes and cosmetics. Additionally, the category appeals to a broad range of consumers, regardless of traveler’s origin or culture, making this product category quite profitable for airport enterprises.

The food and beverages segment is expected to grow significantly over the forecast period. Food enthusiasts obsessed with their favorite food brands look for company-operated food chains or food outlets. Moreover, local food vendors also attract food lovers, which is projected to increase the segment’s market share overall. Additionally, market players are undertaking growth strategies to increase segmental share. For instance, in July 2022, Autogrill, the leader in Travel Food & Beverage (F&B), partnered with Dufry, a travel retail giant, to create an integrated global Travel Experience player. Via this partnership, both companies will address around USD 2.3 billion passengers in more than 75 countries in nearly 5500 outlets across 1200 airports and several other locations.

Analysis by Airport Size

The market is segmented into large airport, medium airport, and small airport based on the airport size. The large airport range segment accounted for the majority of the market share during the forecast period owing to its ability to manage and navigate enormous levels of passenger traffic along with the presence of established, multinational retail chains. Additionally, large airports are typically used by both domestic and international travelers, which gives airport companies access to a vast consumer base, increasing sales and revenue of retail products. Moreover, large airports usually offer a wide range of retail products and spacious shopping areas. They are noted for their upscale retail offerings, such as designer shops and luxury boutiques, among others offering high-end products and well-recognized brands.

Analysis by Distribution Channel

The market is segmented into direct retailers, specialty retailers, department stores, and others based on the distribution channel. The specialty retailers segment holds the leading position in the market and is likely to maintain its dominant position throughout the forecast period. Specialty retailers segregate themselves with their dedicated customer support, well-curated product lines, and interactive storefronts. They bring excitement and curiosity to travelers, enticing them to explore and purchase unique products that capture the essence of the location’s identity, culture, and history. Furthermore, specialty retailers use targeted marketing strategies to attract particular consumer demographics such as food lovers, affluent tourists, eco-conscious consumers, and tech-savvy individuals.

Regional Analysis

The airport retail market is segmented into North America, Europe, Asia Pacific, South America, and the Middle East & Africa based on geography.

North America accounted for the largest market share in 2023 in terms of revenue. The region’s airports offer a diverse range of retail alternatives, including high-end boutiques, duty-free stores, electronic retailers, specialty stores, and food & beverage establishments, among others. For retailers and airport enterprises in North America, improving the passenger experience through personalized services, digital technologies, and innovative retail concepts is a primary goal. Additionally, renowned brands and designer labels aim to engage and encourage travelers to make purchases, thus generating a more significant chunk of revenue. Moreover, North American airports are setting new standards for integrating technology into the retail experience, thus leading to regional growth in the global market.

Asia Pacific is expected to grow significantly, with the highest CAGR throughout the forecast period due to the rapid expansion of the region’s aviation markets. Furthermore, factors such as growing urbanization, increasing middle-class population, and rising consumer disposable income also play a crucial role in favoring market expansion. In emerging economies of Asia Pacific, such as India, China, and Southeast Asia, air travel is expanding swiftly on both international and domestic levels. In light of the region’s urbanization and economic growth, new airports are being constructed, and existing ones are being expanded. These refurbished airports feature state-of-the-art retail spaces, cutting-edge technology integration, and innovative architectural designs to increase passenger footfall and, eventually, spending on retail goods and services.  These aspects are projected to drive the growth of the airport retail market in Asia Pacific.

Key Players Covered

The report includes the profiles of various key players, including Airbus, The New Shop, Dubai Duty-Free, Dufry AG, Gebr. Heinemann SE & Co. KG, Airport Retail Group, LLC, DFS Group Ltd., King Power International, China Duty-Free Group Co. Ltd., Flemingo International, The Shilla Duty-Free, and Japan Airport Terminal Co. Ltd.

Key Industry Developments

• June 2023: King Power International, a Thai travel retail group, renovated its retail space at Suvarnabhumi Airport. This development was aimed at elevating their esteemed collaborations with prestigious global luxury brands.


• May 2023: Smartseller, a joint venture established in 2020 by Gebr Heinemann and Casualfood, underwent a complete redesign of its retail space. Smartseller specializes in high-quality food-to-go outlets, along with duty-free, food & beverage, and convenience retail space. Under this redesign development, various components have been merged into an open, unified concept.