Tesco to Open First Airport Store

Discussion
Sep 09, 2010
Tom Ryan

By Tom Ryan

Tesco has chosen Glasgow Airport as the location for its first
airport store. The Tesco Express, its c-store format, will cater to vacation
travelers making last-minute travel purchases, airport workers, as well as
returning passengers who need to buy groceries before heading home.

The store
will be open 24 hours and offer a wide range of goods similar to those seen
in Tesco Express stores across the United Kingdom, including dairy products,
pre-prepared meals, breads, sandwiches, snacks and drinks. The size of the
average Tesco Express is about 2,000 square feet versus about 40,000 square
feet for Tesco’s standard supermarket. Perhaps most surprisingly, the airport
store’s prices will be the same as a typical Tesco Express.

"It means a huge improvement in the choice available to our passengers
and staff in the terminal," said Amanda McMillan, managing director of
Glasgow Airport, in a statement.

While outgoing passengers are seen as part of the
store’s target mix, the airport’s more than 5,000 workers are also expected
find use for the store. But
a particular target is arriving passengers.

Tesco surveyed passengers at
Glasgow Airport to find out what home comforts they missed on vacation. More
than a third named Irn-Bru, Scotland’s national drink. That was followed closely
by square or lorne sausage, tattie scones, black pudding and Tunnocks Teacakes.

Tesco’s Mr. McElry said in the statement that the store "will
allow us to cater for those holidaymakers arriving home and looking for a fantastic
range of Scottish favorites at a great Tesco price."

The new store will
open in the autumn, creating around 20 jobs.

Discussion Questions: What do you think of Tesco’s approach to operating a
convenience store in an airport? Is this an opportunity for c-store retailers
in the U.S.?

Please practice The RetailWire Golden Rule when submitting your comments.

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16 Comments on "Tesco to Open First Airport Store"


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Joel Warady
Guest
Joel Warady
10 years 8 months ago

Tesco has always been innovative when it comes to trying new locations. Having an airport store is another experiment definitely worth trying, and I think we will see more of this after their initial success.

In the UK, it is not uncommon to see Tescos, Sainsburys, and Waitroses in the rail stations throughout the city. Extending this concept to the airport makes all of the sense in the world, and it makes one wonder why this has not been tried before by a US chain.

To be fair, there is a small convenience store selling fresh foods in Amsterdam’s Schipool Airport, a store that is frequented by travelers and employees alike. So the Tesco idea is one that is not necessarily new, but certainly an idea that Tesco will run with, and if successful, I think we will see a national rollout of the concept.

Nice move on Tesco’s part.

David Livingston
Guest
10 years 8 months ago

I think this is more of a novelty. I’ve seen a drug store chain have an airport store before and the Post Office, I think at the Pittsburgh, PA airport. I’m sure it’s been tried but rents are so high, stores need to up their prices to succeed.

Paula Rosenblum
Guest
10 years 8 months ago

I confess…I totally can’t relate to this concept. For the airport workers, sure…it’s a nice convenience. Maybe (and it’s a BIG maybe) outgoing passengers will choose to buy deli meats, cheese and bread to make their own sandwiches (MAYBE), but I cannot visualize someone coming home from a trip–vacation or otherwise–and saying “Alright, I’ll stop off at the terminal and pick up a liter of milk and some paper towels. I can manage it along with all my luggage.”

It just seems completely bizarre.

Ryan Mathews
Guest
10 years 8 months ago

In the U.K. Tesco has a tremendous track record of success built, in part, on making formats fit market opportunities. No reason to believe their venture into airports will be any less successful.

That said, I don’t know enough about the economic model of retailing in Scottish airports to draw a perfect analogy but I do know enough about U.S. airport retailing models to know that it probably wouldn’t work as effectively here.

The competitive set is broader; the rents are too high; and regulation and contracting terms are too strict.

John Karolefski
Guest
10 years 8 months ago

It’s an interesting idea, although not totally new as noted in another post. I applaud great retail brands like Tesco taking risks and trying new things. If it doesn’t work, it doesn’t work. My hunch is that airport workers will be the prime shoppers, but I wouldn’t be surprised if a lot of returning passengers grab their favorite Scottish fare that they missed while away.

Anne Bieler
Guest
Anne Bieler
10 years 8 months ago

This could be a rewarding move for Tesco, providing the favorite snacks for the trip home and airport workers. Airport outlets tend to concentrate on fare for tourists (not surprisingly!), with a lot of predictability in the selection. For frequent travelers and workers, having a convenient quick stop might develop into something more. Tesco will likely explore with their research partners, and adapt the store/marketing as a better understanding of the needs of these new shoppers emerges.

Camille P. Schuster, PhD.
Guest
10 years 8 months ago

A number of airports are trying different strategies to make shopping a bigger part of a person’s stay. Tesco’s experiment will be interesting to watch. I have a hard time imagining people planning to do grocery shopping at the airport and managing those bags along with their luggage. However, I can imagine people arriving back from a trip, figuring they have to get something to eat, feeling as though they missed some local favorites, and picking up a meal to take home–depending upon where the store is placed in the airport. Will it be before customs, after customs, on the way to the baggage claim, or at the baggage claim? If the location is with all the other stores and shops, it will provide a nice alternative for workers and for people leaving on a trip or for those who have a long layover.

Gene Detroyer
Guest
10 years 8 months ago

The article is a bit confusing. If outgoing passengers are part of the store’s target mix, then the store must be inside security. If terminal workers are the target, the store must be outside of security. If arriving passengers are the target, the store must be located where passengers exit as they follow signs to baggage claim.

That being said, there is some sense to this idea (outside of security). Arriving passengers, particularly those arriving at odd hours and who have been away some time, will know that they need some basic foodstuffs when they arrive at their home. And, the last thing they would want to do is make a separate trip to a store, which may not even be open.

Similarly, airport workers, who often work odd hours, would see this as a great convenience.

This is a low risk business proposition for Tesco. Even if the store only breaks even, it has great branding value to those arriving after being away from home.

Gregory Connolly
Guest
Gregory Connolly
10 years 8 months ago

I lived in the UK for four years and quickly became a fan of Tesco. Smart,customer focused grocery store. A grocery retail innovator way ahead of anything I was used to in the US. Airports – this makes so much sense it’s a wonder that it hasn’t happened before. To any traveler used to being ripped off for the “convenience” of shopping at the airport this will be welcomed. Don’t forget the airport staff. Make it easy and they will buy. Make it easy and affordable and they will buy a lot!
This fits the Tesco brand strategy and everything must start with that.

Bernice Hurst
Guest
10 years 8 months ago
First, full disclosure. I really really really hate Tesco. But I will not go into that here. This particular idea is not original in the UK and, if it works, Waitrose, Sainsbury and Simply Food (Marks & Spencer) will quickly provide competition. It may work to an extent, and some of our airports do already have such stores which are convenient for incoming passengers who may not want to start trailing around bigger stores on their way home from vacation just to pick up milk, bread and eggs for example. With regard to the opportunity in the US, I think it is pretty much a non-starter, mainly for the reasons already pointed out, especially by Paula. In addition, you guys have got so much choice of 24/7 stores to hit on the way to or from home that there is no real value for passengers. I’m sure that airport workers will continue to shop when and where they do already, near their homes or whatever, and see only limited value in a c-store at work.… Read more »
Lee Peterson
Guest
10 years 8 months ago

You know, I don’t know what all the convenience retailers have been waiting for with this idea! I mean, the best place to buy anything fresh at the airport currently is at a Starbucks, and that’s pretty much it. A well done C-store simply ties together many offerings currently there; magazine, coffee, sandwich, etc., PLUS the possibility of new things like fresh produce.

This is a no-brainer in my book–hurry up!

Craig Sundstrom
Guest
10 years 8 months ago

I’m surprised by some of the negative responses here–especially as I’m often the naysayer–but I think this idea can fly (pardon the pun): who amongst us hasn’t said on returning home “Oh, dammit, I need to pick up ___ for tomorrow”? This can save one detour on an already exhausting trip home (provided, of course, that one remembers prior to leaving the terminal).

Herb Sorensen
Guest
10 years 8 months ago
Just yesterday I noticed more than one 7-Eleven store in the Mexico City airport. And then, coincidentally, I was reading (again) about the fantastic role of saturation of stores in the growth of Starbucks. There are really only three options for a retailer – get your customers to come to you, go to your customers, or remotely sell (phone, internet) and then deliver to your customers. Supermarkets dropped the ball 30 years ago when they refused to go to their customers, essentially guaranteeing the world-wide growth of the C-store industry. Stores do not “own” their customers, and customers only come to the store because someone else hasn’t already come to them, where they are. It isn’t just Starbucks. Walgreens top selling store used to be on Michigan Avenue, heading south into the Chicago Loop. Walgreens built another store right across the street serving the Michigan Avenue traffic heading north, and produced another top selling store. When Starbucks began building their own stores in the parking lots of supermarkets that also had a Starbucks inside the… Read more »
Mel Kleiman
Guest
10 years 8 months ago

I travel a lot and would love a c-store in the airport for a number of reasons: selection, convenience and once I get in the car leaving the airport the last thing I want to do is stop somewhere to pick something up. I just want to get home.

John McNamara
Guest
10 years 8 months ago

Sounds pretty much the same as a European train station which generally has drug stores, groceries, and plenty else. Seeing as most airports in Europe are located on rail lines, it’s a convenient but not ground breaking novelty. If anything, American airports like LAX are some of the most boring transit hubs on the planet.

Julie Stoner
Guest
Julie Stoner
10 years 8 months ago

Interesting. My last order of business before leaving the UK to fly back to the U.S. is to fill a carry-on with UK treats to bring home. I buy crisps, toffee, chocolate, shortbread, whatever I can fit. It’s a great way to use up my remaining pounds and to continue to enjoy a taste of the UK.

Heathrow and Gatwick have some stores with decent prices on these items but it would be great to see what Tesco adds to the mix. I enjoy shopping at the stores in the London airports.

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