Airports evolve into mini malls

NEW YORK -- If you've done any traveling lately, you've likely noticed that many airports are looking more like malls.

"I was kind of surprised to see jewelry here," said Jackie Steven of Aberdeen, Scotland, while doing a little preflight shopping at Newark Liberty International Airport one recent afternoon. "You don't expect jewelry."

But jewelry is just one of the many new retail offerings popping up in airports. Fliers are as likely to find a Brooks Brothers or Victoria's Secret as an overpriced doughnut cart. Weary road warriors can spend layovers in a spa as well as a bar. And if you forget something for the kids, your choices are no longer limited to a few racks of marked-up gift store knickknacks -- name-brand toy stores are cropping up in terminals nationwide.

Airports fund their basic operating costs and infrastructure improvements out of the money they charge airlines to land, passengers to fly and stores to lease space. In addition to paying for labor and construction, airports have had to improve security procedures and accommodate more travelers for longer periods of time since the 9/11 terrorist attacks.

Airports have responded by improving their retail and restaurant offerings to add revenue and meet the needs of passengers. Some airport operators believe their mix of shops and eateries gives them a competitive advantage over other airports.

Gone indeed are the days when air travelers' shopping and eating choices were few and overpriced. Many airports have gone so far as to implement "street pricing" policies, in which stores are required to charge no more for goods sold in the airport than they charge elsewhere.

"All of the sudden, any airport … can be a retail opportunity," said Bob Mann, an airline consultant based in Port Washington, N.Y. "It really has turned into a very different environment than it was 10 or 20 years ago."

On its face, the idea of putting stores usually found in malls in airports is a no-brainer. Retailers like to locate stores in places where there are lots of people, and airports offer a constantly changing, captive audience. For instance, 107 million passengers are expected to visit the three New York area airports this year.

Airports need money to fund operations, and have big, spread-out buildings. Leasing out some of that space for retail is a revenue opportunity with little downside for airport operators.

"What's important about airport traffic is the volume of travelers," said Daniel Butler, vice president of merchandising and retail operations at the National Retail Federation. "It's … new traffic every day."

The number and variety of airport retail offerings has been growing for years, experts say, part of a slow evolution in the way airports think about serving passengers, and raising revenue. But it really took off after the Sept. 11 terror attacks; with travelers urged to arrive more than two hours before flights to clear security, the captive audience in the terminals shot up.

"It has really expanded with the (Transportation Safety Administration)-mandated early arrival at airports," Mann said.

"Since 9/11, people are spending a lot more time at airports,'' said Brian Lassaline, a spokesman for Detroit Metropolitan Wayne County Airport.

Overall statistics on retail growth at airports are difficult to come by, but at just the three New York area airports operated by The Port Authority of New York and New Jersey, retail space grew by 7 percent between 2004 and 2006 to 432,000 square feet.

But are people about to board a crowded plane really willing to stop and buy things they then have to carry on with them?

"They're actually willing to do so more often than you'd think," said Brett McAllister, senior vice president of operations and chief financial officer at Airports Council International, a trade group.

Many airport retailers offer free shipping. Others find they sell more smaller items such as ties or jewelry that don't cause carry-on problems.

"If you look at what they're selling predominantly at those locations, it's the cash-and-carry items," Butler said. "They also do a lot of things that are giftable."

While airports see stores as a revenue opportunity, travelers view them as a convenience. Some passengers find they can take care of routine errands while waiting for flights.

"When there's a layover it definitely makes it convenient," said Art Foley, of Columbus, Ohio, on his way to catch a flight at Newark recently.

"If they can do it while traveling at the airport, then they don't have to waste time on a weekend at a mall," McAllister added.