Grilling up even more retail/F&B consolidation


The tale of two major Italian aviation companies, Alitalia and Autogrill, could not be more different. In a week when state-owned Alitalia surrendered to a meagre USD184 million deal by Air France-KLM, the privatised Autogrill, a leader in airport food and beverage (F&B), has become the leading global provider in the fast-growing airport retail market, controlling USD2.4 billion in annual retail sales.

  • Italy’s Autogrill becomes leading global provider in airport retailing worldwide in the same week as Alitalia fire sale;
  • Autogrill snaps up extra 49.95% of Aldeasa, as well as 100% of World Duty Free;
  • No further major acquisition targets, though Autogrill will "seize" any key opportunities;
  • ACI expects retail, F&B and duty free sales to grow rapidly in the coming years, as airports diversify income streams;
  • F&B is the largest category of retail, accounting for 32% of all outlets F&B segment is third highest performer in gross sales per passenger (behind duty free and currency change), but lowest performer in gross sales per sqm terms. Retailing accounts for 10% of airport revenues

In a three-year acquisition spree culminating last week, Autogrill snapped up 49.95% of Aldeasa in 2005, Alpha Group Plc in 2007 and now 100% of World Duty Free (WDF) from BAA, in addition to a further 49.95% stake in Aldeasa (for a total holding of 99.9%). This is in addition to its purchase of HMS Host in 1999. All of these acquisitions are, in turn, acquiring more outlets and organically expanding their networks to create a truly global business.

Expanding airport outlets - Autogrill and acquisitions








Alpha Group








World Duty Free




HMS Host




* Includes airports, motorways, railway stations, shopping centres, trade fairs, museums and city high streets ** Includes motorways/malls
Source: Centre for Asia Pacific Aviation

In 1995, prior to its privatisation, Autogrill was a domestic Italian food & beverage motorway company with sales of approximately EUR800 million. Today, the Group has a presence in 42 countries and sales of approximately EUR6 billion. Autogrill is controlled by Edizione Holding SpA (the Benetton family's financial arm) through Schematrentaquattro Srl (a wholly-owned subsidiary of Edizione Holding), which holds 58.7% of its share capital.

Autogrill Chairman, Gilberto Benetton, stated the company will be busy "for a couple of years" integrating its new acquisitions and though it does not foresee further acquisitions, there may be "opportunities we will obviously know to seize".

The two latest transactions of Aldeasa and WDF will be funded through fully committed new debt facilities, and (with Alpha Group) are expected to deliver annual synergies to the group in the order of EUR40 million by 2009. The two acquisitions will be earnings neutral in 2008 and accretive from 2009.

Autogrill's strengthening grip over the airport retail and F&B sectors comes at a time when Airports Council International (ACI) expects retail, food and beverage and duty free sales to grow rapidly, as airport operators place a growing emphasis on customer service and on diversifying income streams in the coming years.

Food and beverage is the largest category of retail, accounting for 32% of all outlets. The airports with higher percentages of food and beverage outlets are predominantly North American airports, while European airports generally have the lowest proportion of food and beverage outlets, according to a recent ACI Airport Economics survey.

Speciality retail outlets are the next largest segment, accounting for 29% of total outlets. When combined with news/gift, these two segments represent 45% of all outlets.

The F&B segment is the third highest performer in gross sales per passenger terms (behind duty free and currency change), according to the ACI report - so it is a good cash-flow business. But in terms of yield, F&B is the lowest performer in gross sales per sqm terms.

Overall, airport retailing accounts for around 22% of total non-aeronautical revenues at airports, according to ACI. Non-aeronautical activities account for 48% of total revenues. So at over one dollar in every ten at airports worldwide, Autogrill, with more former competitors under its belt, has tapped into a rich vein.

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