Raphaël Jeanniot

Brands & Development Dir., SSP

How did the Covid-19 crisis impact airport and station food outlets? What have been the consequences for SSP in particular?

We closed all our points of sales mid-March, following government’s decisions [to lock down]. The first impact is of course a financial impact, as you can imagine.

What do you think the challenges are for food businesses in airports and stations at this stage of the crisis?

At this stage, we face very short term challenges. We are progressively re-opening our point of sales, as activity recovers [the interview took place late summer, before the second wave of lockdowns]. It is a very gradual recovery. It is actually slightly faster in stations than in airports, as many airports are still closed or have very limited traffic. 

Our challenge is to resume operations in a profitable manner knowing that our turnover will be much less than usual. It requires some adapting: a shorter range of products, better adapted to a slow activity, and simplified operational processes. We are working along with all our brand partners to implement these changes.

Would you say that some concepts are more resilient than others? Any good practices that are emerging?

When everything is down to zero, no concept is good enough! But now that we are reopening, we can say that the best locations, next to passenger flows, are the ones that work best. That being said, all post-lockdown regulations have strongly favored take-away sales. That’s especially true in stations as on-board catering isn’t fully operational yet. 

The outlets that work best are the ones that can attract customers all day long, starting in the morning. Classic, well-known brands like Starbucks or boulangerie brands performed well, considering this tough context. Could that be because travellers need the reassurance of landmark brands, and offers they’re familiar with? It’s too early to say.

Future is very uncertain -- traffic is highly volatile, notably air traffic. The traffic mix is changing: younger, budget travellers seem to be ready to travel again, while business travel seems to be facing durable headwinds. Similarly, teleworking may impact passenger counts and mix in train and mass transit stations. Who do you think will lead the industry to tackle these challenges and stimulate travellers’ spending? From airport or station managers, or F&B operators themselves?

 Teleworking is indeed strongly adopted, and we see more leisure customers than business ones. Business travel seems to remain limited. Consequently, recovery is slower on weekdays (Monday to Wednesday) than during the weekend (Thursday to Saturday).

We don’t know whether teleworking will last, but if it does, it doesn’t necessary mean less trip taken, notably if some families decide to exile themselves outside of large cities. Maybe there will be less short commuting trips and more long distance ones? Once again it is too early to say.

At this stage we need to wait and see. And if traffic does slow down durably, then what we need is more coordination between all players: brands and airport and station managers like ADP, RATP or SNCF in France... 

Talking about coordination between players, are there any specific initiatives you would like to join?

Well, I don’t know how they translate into initiatives, but there are definitely three work directions, two conversations that must begin and that we would like to be part of.

First, the business model must change.

The travel retail industry prospered, fuelled by an exponential growth in traffic that was supposed to continue for years and years. Retailers have committed to increasingly high guaranteed minimum revenues and concession rates. The landlords were in a strong position and imposed an unfair level of risk sharing.

All changes with Covid-19, the deepest crisis ever, with a stronger and more durable impact on traffic than anything we experienced before. Management and risk-sharing must be reimagined and better shared, as there is no chance that the industry will come back to previous practices.

If that’s the case how can airports and stations guarantee the funding they need from retail and catering revenues? What’s the best way to guarantee this revenue, while still attracting the investment and expertise of quality operators and their brand partners? Stations and airports will need to move beyond better risk-sharing: they’ll need to reimagine their commercial offer in terms of size, structure, mix of stores, categories and brands, etc. Brands too will have to rethink their airport presence, their offering and P&L structure.

Second, we need to place customers at the center of our future decision-making.

It may be too early to say for sure, but it is likely that this crisis will change customer behaviours, needs and attitudes, not least due to social distancing and other protecting measures. Needs will evolve, and this is a creative market that will bring solutions, new products and new services.

In this climate of change and uncertainty, operators, brands and landlords will certainly try to attract these new travellers in priority, even before their immediate economic interests. Let’s take the example of pricing. It is a well-known fact that prices are higher in airports and stations than in the rest of the city. This inflation is largely due to the pressure on rent that forced operators to raise their prices to protect their operating margins. So far, customers have largely accepted it, but will they still do in times of crisis? They may become more demanding on price and quality, and overall value for money. We may need to adapt.

Last, digitalisation will be the most obvious solution.

The entire world switched to e-commerce. This sector’s extraordinary growth has been boosted by the “forced adoption” on online retail during the lockdown periods. We all buy online because, even if supermarkets are open, we want to avoid waiting in line in close proximity to other shoppers, wearing a mask… Many customers who couldn’t dine out and didn’t feel like cooking ordered food from chefs, delivered at home. That was a massive test, and like in any test, some people will remain loyal to this new consumption mode.

That means that all travel retailers, food operators, landlords will have to accelerate their digital and omni-channel development. Of course, we are not talking about a full digitalisation, but about how we connect both the digital and physical worlds in the specific context of stations and airports. This is maybe the most relevant area, however very few players have invested in it yet.

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