Author of “Travel Retail - The Insider’s Guide”. We help Travel Retail to maximise commercial value from their data - Building a business that clients love to work with.
Concession Fees and MAGs..... Airport retailers do not pay rent in the conventional sense. They pay a percentage of turnover that varies by category / subcategory. If sales go up, the airport benefits because they are getting their cut. This is called the Concession Fee. To explain what this can be like, I want to share a personal story. A few months ago, on a lads night out (after a judgment altering amount of alcohol was consumed – not a lot these days!) I agreed to do a half marathon with them at the end of March. Of course, I put the training off and only started at Christmas. Thankfully, despite the Dystonia it is going reasonably well and my last long run was 8 miles. What has this got to do with Concession Fees?? Well…. The prospect of running 13.1 miles is always there at the back of my mind and the same can be said for concession fees for retailers. It is always a consideration for retailers. Every month it is being calculated by the retailer finance team and every month it is paid. This is a pressure that drives retailers to get brands to give better margins and better support. But what if sales go down? What happens then? This is where there is a sting in the tail! MAG’s…. Minimum Annual Guarantees. I will explain that tomorrow! For now, Travel Retail revenue is starting to look like a layer cake don't you think? Have a great day. I write a daily post about Travel Retail. To make sure you receive it, Just click on my profile, connect with me or hit follow, and click the notification bell 🔔 One Red Kite– Award Winning | Data Management | Reporting & Analysis | Category Projects #dutyfree #travelretail #airportretail Photo by Vitalii S. on Unsplash
