Food retailers mull pact with airlines to boost sales

Written by Mona Mehta | Shaheen Mansuri | Mumbai | Updated: Aug 31 2009, 06:32am hrs
Owing to a 50% dip in air traffic at city airports across the country in the first quarter of the current financial year, organised food retailers such as Caf Coffee Day and Cookie Man having retail stores at city airports have recorded 20% to 35% fall in sales.

As a result, certain fast food retailers are planning to join hands with national and international airlines during September-October 2009 in order to increase sale of their food products, coffee retailing within flights.

According to Venu Madhav, national operations head, Caf Coffee Day, We have definitely started feeling the impact of low air traffic on footfalls and sales at Caf Coffee Day stores based within airports. Hence, we are planning to tie up with national and international airlines during September to October this year in order to increase sale of food products within the flights. For the purpose, we will initiate talks with them soon. We will implement a consumer push strategy through institutional sales such as airlines, in addition to consumer pull at retail stores within airports. Caf Coffee Day is generating 25 lakh footfalls within airport in a week, as compared to a usual 50 lakh footfalls.

Australian Foods Private Ltd, which sells Cookie Man, a leading baked Australian cookies brand in the country, is witnessing an increase in retail sales at the rate of 15% to 18% in Q1 of 2009-10, compared to 20% to 25% figures recorded during the corresponding period in the previous year, Pattabhi Rama Rao, president, Australian Foods Private Ltd, told FE.

According to Rao, There are 200 receipts per day at Cookie Man stores within airports. We already have a tie-up with Kingfisher Airlines to serve Cookie Man biscuits in flights, apart from a tie-up with large caterers such as the Taj Group and Oberoi, which serve Cookie Man cookies to other airlines such as Quantas, Continental. We generate Rs 1 crore sales per annum through airlines tie-up. Australian Foods Private Ltd is currently talking to other national and international airlines to tie up with them for Cookie Man cookies.

However, Croma Zip retail stores based within Mumbai and Delhi airports are witnessing stagnant sales growth, instead of dip in sales, says Ajit Joshi, managing director, Croma.

To this, Bappaditya Basu, vice presidentretail, Jones Lang LaSalle Meghraj opines, It is because in times of recession where corporate and leisure travel has dipped, only the quality crowd comes to the airport which has the affordability and inclination to shop while traveling leading to actual sales conversion of new technological electronics.

Basu explained that the availability of space has shrunk.