Interview: Aïda and Lagardère Travel Retail plot new expansion phase

Aïda has revealed a new café design concept exclusively to The Moodie Davitt Report

AUSTRIA. Viennese coffee and pastry shop brand Aïda, like all hospitality businesses, has been acutely affected by the manifold challenges of COVID-19 with its domestic business severely hit and its international travel retail ambitions temporarily derailed. But it is now emerging from the crisis by opening new stores with its partner Lagardère Travel Retail, first in Innsbruck, and soon with a new look for an airside store in Vienna International Airport, exclusively shared with The Moodie Davitt Report. Our Senior Business Editor Mark Lane talked to Aïda Executive Director Dominik Prousek and Lagardère Travel Retail Austria CEO Ursula Fürnhammer about what lies ahead.

When The Moodie Davitt Report visited Vienna early last year to get the inside story on the international expansion plans of coffee and pastry shop chain Aïda, Executive Director Dominik Prousek and his team looked like they were on the verge of big things at home and abroad.

The landside Aïda cafe at Vienna Airport had an outstanding first year of trading, but the suspension of operations in Terminal 1 has led to its closure for the foreseeable future

The first store in an alliance with Lagardère Travel Retail had hit a remarkable 190% of its first-year target in a prominent landside space at Vienna International Airport T1, a mobile service airside was thriving, and overseas markets including China, Poland, Saudi Arabia, Croatia, Kazakhstan and Bosnia and Herzegovina had been successfully tested with Aïda pop-up stores. The timing seemed perfect for the two companies to advance plans to open a permanent airside store in Vienna’s new terminal and to shift its joint global travel retail footprint into new continents.

Dominik Prousek: “There will be a new normal, and things will move fast when that happens”

Domestic market hit by COVID-19

It was January 2020, and Aïda – whose turnover had exceeded €26 million in 2019 – and Lagardère’s partnership was about to be further cemented with a new travel retail venture, this time with the opening of a 300sq m outlet at the main train station in the Austrian city of Graz. But by now, a COVID-19 shadow was emerging across the business world, with a direct impact on tourism and travel markets.

Although the Graz store did open in May, and in the words of Prousek “got off to a phenomenal start”, within weeks it was abruptly shut, as Austria, like most of its European counterparts, went into full lockdown. Vienna Airport Terminal 1 was closed indefinitely. And suddenly Aïda’s Vienna factory – which in ‘normal’ times had over 100 pastry chefs producing three tons of cakes, snacks and pastries daily, alongside 30 types of ice cream daily – was also forced to close, as was its network of more than 30 cafés in the Austrian capital.

Aïda’s previously impregnable business model in its home market has stuttered on since that time, first with the reopening of stores with half of the tables closed off to allow for the required social distancing and with track and trace systems in place, and more recently – with a new full lockdown being reinstated in the autumn – the company was restricted to offering a takeaway only service.

More than half of Aïda’s Vienna cafes are currently closed due to COVID-19 and its catastrophic effect on the city’s tourism

Although this has enabled a trickle of vital income, store revenues are currently at a fraction of the normal average, and Aïda’s popularity as a traditional meeting place for families, friends, associates, and vitally, tourists, to share coffee and pastries has been completely compromised for the foreseeable future, as COVID-19 restrictions continue.

“We don’t share the risk, we share common success. Lagardère is our partner and it is therefore important for us to act in a spirit of partnership. In times like these we can achieve much more together than one alone” – Aïda Executive Director Dominik Prousek

Prousek, who is the great grandson of Aïda founder Josef Prousek, says: “We’re very thankful to be able to bring in some revenues, which is keeping us above water. But we have now had five months of total lockdown in Austria, and all of our stores can only perform during this time as a selling to go operation. Only 12 of our 30+ stores are currently open, and they are mainly the ones with the lower rents in suburban areas which don’t rely on tourists. Of course, there are currently no tourists at all in Austria, which is a disaster for the economy of a place like Vienna, which is heavily reliant on tourist spending.”

Aïda’s café at the main train station in the Austrian city of Graz – another partnership with Lagardère Travel Retail – got off to a flying start but has been forced to close until COVID-19 restrictions are lifted

He adds: “We are a chain of traditional coffee shops where people like to meet, sit and gather and talk with each other – this is the time-honoured driver of our business – and this is something which isn’t possible at the moment. We’re grateful that at least we can have ready to go business but at the same time we’re badly missing the interaction with our customers on the basis of them being able to sit down.”

Vienna in lockdown limbo

Although Prousek reports that the current lockdown situation in Austria is soon to be reviewed, he doesn’t foresee any positive developments for the Aïda business before April, and even that, he laments, is probably being optimistic.

Some of the cake products which have made Aïda famous across the city of Vienna

“The vaccination programme is going very slowly in Austria,” says Prousek. “By March they have promised that we will have done 800,000 first vaccinations, and by the end of that month only about 5% of our population will have received their second dose, which is not very promising.”

He continues: “So realistically we’re looking ahead to June or July for when tourism will pick up again. We don’t have a crystal ball to see what’s going to happen in the future, but I can tell you we’ve been working so hard now during this time to prepare for future growth, because there will be a new normal, and things will move fast when that happens.”

More exclusively-revealed renderings of the Aïda concept for a new café design; the designs are also earmarked for use in the brand’s international expansion plans

A new Aïda concept

Central to those future growth plans is Aïda’s partnership with Lagardère Travel Retail, and a move away from the socially-driven café model to evolve to a more grab-and-go style plan for the new airside café at Vienna Airport, and also for the international travel retail locations the partners are seeking as we emerge from COVID-19.

Prousek gave The Moodie Davitt Report first media sight of the concept drawings – he says they have been met with a “great reception” from Lagardère – for the new style cafés, which do offer limited seating but can be manned with only one or two people per shift, depending on how busy the travel retail location is. These cafés, of course, feature the cake bar for which Aïda is famous, and also a range of coffees, savoury snacks and draft beer and wines.

How the new café inside Tirol’s most popular shopping mall will look

More immediately though, a more eyebrow-raising step has been taken, with Aïda and Lagardère joining forces to open two new cafés in the Austrian city of Innsbruck. Neither is in the French travel retailer’s traditional hunting ground of concentrated travel and tourism locations.

“The Aïda brand always remains authentic, which means that longstanding regular customers still feel right at home, but new clientele is also addressed” – Lagardère Travel Retail Austria CEO, Ursula Fürnhammer

Lagardère acquired two former café sites, currently being fitted out in the pink-dominated Aïda style, one a 300sq m store adjacent to Austria’s second largest hospital – Universitätsklinik Innsbruck– and close to Innsbruck University on the well-known Anichstraße, the other a 50sq m space inside the state of Tirol’s most popular shopping complex, DEZ.

Building on brand recognition

I ask the recently appointed Lagardère Travel Retail Austria CEO, Ursula Fürnhammer, if the move to open these two new locations signals a pivot for the company’s strategy away from the currently volatility of the travel environment, a bid to widen the company’s portfolio into new territory. She replies: “I wouldn’t put it like that. One of the two areas is located directly at the entrance to Austria’s second largest hospital, which means that we are still in the broader scope of our business strategy.

Concept for the new Aïda café adjacent to Austria’s second largest hospital, Universitätsklinik Innsbruck

“We would not have taken the second space without the first, and then again vice versa, because clearly it makes no sense for us to go to Innsbruck for just one shop. But Innsbruck is also a very interesting location through the very classic travel retail lens,” Fürnhammer adds, hinting that the city, famed as a skiing location, could be a future target for travel retail activity.

Asked why Aïda hadn’t gone it alone on these Innsbruck opportunities, given his company’s vast experience in the domestic market, Prousek refutes the suggestion that it was just a case of sharing the risk of a venture outside the comfort of his home territory of Vienna. He says: “We don’t share the risk, we share common success. Lagardère is our partner and it is therefore important for us to act in a spirit of partnership. In times like these we can achieve much more together than one alone would be able to. Each of us brings in their own strengths and together we can achieve a lot.”

One of Aïda’s best-known products, Mozart Cake, created by the company’s founder, Josef Prousek

Fürnhammer reciprocates Prousek’s confidence in the partnership, highlighting what she considers to be the main strengths of the Aïda concept. She says: “In my opinion, Aïda has three key success factors. In Austria the brand enjoys a very high profile, a very high brand recognition… whoever you talk to in Austria about Aida, everyone has their story about it, be it a childhood memory or a habit when visiting Austria’s capital city.”

She continues: “Secondly, the quality of its product range, produced directly here in Vienna and last, but not least, the brand’s history and tradition. The family perfectly manages to combine old and new, with playful ease; innovations are skilfully integrated whether that’s in the area of assortment, store design or marketing, while Aïda always remains true to its brand core.

Ursula Fürnhammer: “Innsbruck is an interesting location through the very classic travel retail lens”

“In this way, the brand always remains authentic, which means that longstanding regular customers still feel right at home, but new clientele is also addressed. When it comes to travel retail, I would also highlight Aïda’s catchy and unique design and look and feel that has already proven its popularity with nationalities from all around the world; it is a concept that you can definitely export.”

Prousek says that Lagardère’s international experience will be a key driver in Aïda’s future development. He concludes: “It is our declared goal to bring the Viennese pastry and coffee tradition out into the world and COVID-19 has not dented that ambition. What could be better than having a partner like Lagardère with the know-how for the international business on the one hand and our products on the other hand? It’s an absolute win-win situation.

“We have already proven that we are a successful concept in the travel retail business, both in the airport and railway environments. And I think now more than ever, with what has happened with this health crisis, it’s important to back concepts that work, that show the revenues and have categorically proven that they can reach and exceed tough targets. Aïda is ready for a phase of significant growth both at home and overseas, as soon as pandemic conditions allow.”

Read our interview with Dominik Prousek, when we visited Vienna for an exclusive insight into the world of Aïda, here.

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