Airport Retail Market Power: A Performance Assessment Framework on Business Success and Regional Retail Market Characteristics

Definition

This entry proposes an integrative approach to assessing market power in airport retail environments that highlights the impact of strategic and operational factors on the performance of the enterprise in a regulated and restrictive commercial environment. Using the Analytic Hierarchy Process (AHP), this entry discerns and quantifies important factors determining market power using weights that include price flexibility, consumer conduct, brand value, technological uptake rate, and barriers to entry. To support this qualitative analysis, this entry combines a quantitative countervailing power model (CP_A/E) and a market penetration model (MP_E/A) to determine the levels of retailer penetration in airport authorities and passenger markets. The integration of these models makes it possible to perform a multivariate analysis of market domination, geographical interdependence, and bargaining power. The findings highlight the configurational complexity in strategic positioning in terms of organizational size, dependence levels, and digital preparedness and provide actionable information for airport managers, concession planners, and policymakers determined to maximize lease deals and improve commercial performance in the face of changing risk profiles.

1. Introduction

Over the past two decades, the aviation industry has witnessed profound changes that have imposed major implications for airport business models and the retail environments of airport complexes. A range of influences, including the commercialization of airport management, the formation of partnerships, as well as mergers and acquisitions along the supply chain, combined with a general trend toward privatization, have cumulatively changed airport governance models and economic policies. Most notable is the corporatization of landside operations and the expansion of concession-based activities, which have focused the attention of airport management on an ever more market-driven and competitive context. Such structural changes have increased competition in the business environment, notably for non-aeronautical enterprises, while also reconfiguring the boundaries and barriers to entry in traditional aeronautical service domains [1,2].

In the context of continued growth, the concept of market power has become an important factor in examining the dynamics involved in the intricacies of retailing at airports. In this context, market power refers to the ability of business organizations—namely, retailers and service operators—to influence prices, restrict supply, and increase profitability through the leveraging of distinctive structural and contextual benefits. The most obvious of these benefits is the locational monopoly enjoyed by airports. Passengers essentially form a captive market, faced with limited opportunities for off-airport purchase or dining, thus allowing airport retailers to charge high prices [3]. In addition, the imposition of leasing restrictions and exclusivity agreements often leads to a limited number of suppliers dominating key retail categories, which reduces competition and widens profit margins [4].

Passenger behavior further underpins this market leadership. Time-constrained travelers tend to prioritize convenience over price, suggesting reduced price sensitivity and a greater willingness to spend on required products and services [5]. In response to this behavior, airport retailers differentiate through customized product ranges, high service levels, and loyalty-generating initiatives. The arrival of digital transformation, including personalized marketing, app ordering, and omnichannel retailing, has further allowed retailers to improve consumer engagement and operational efficiency [6]. A growing body of literature supports these observations. Studies have shown that aspects of flight schedules, airport layout, and length of stay are critical determinants of consumer behavior and spending patterns [7,8]. Moreover, the influences of brand exclusivity, limited price comparability, and digital integration all combine to create a distinct retail setting characterized by the structural advantages and predictability of consumer behavior. Moreover, airport retail’s resilience in the face of crises, such as the COVID-19 pandemic, demonstrates the industry’s ability to evolve through dynamic adjustments in pricing models, the restructuring of services, and inventory management [9].

This entry attempts to measure both the degree and type of market power in the context of airport retail, highlighting its impact on corporate performance and its role in promoting regional market development. Utilizing the Analytic Hierarchy Process (AHP), this entry delineates and ranks the primary indicators of market power, examining their implications in terms of retail productivity and resource allocation in the context of the airport setting. These findings present important implications for airport managers and retail concession operators, especially in the development of concession contracts and the creation of viable business practices [6]. This research ultimately contributes to the literature on competitive strategy, business development, and economic planning in the airport sector. It presents a structured framework for measuring the performance of retail markets under conditions of unique constraints but considerable opportunities—highlighting the ways in which the strategic management of market power can balance commercial success with goals of sustainable regional development.

2. Market Power and Dynamics in Airport Retail

2.1. Key Characteristics of Market Power

Airport retailing’s evolution as a central component of the matrix of non-aeronautical revenue flows has become a significant factor in the financial sustainability of modern airport operations. In many global hubs, the commercial activity carried out in the terminal generates revenue to the same extent, and in many instances, to a greater extent, as aeronautical revenues, and thus emphasizes the strategic role of retailing in the business models of airports. This development indicates a larger transformation in which the role of the airport has evolved beyond a mere transit site to a diversified commercial space. In this context, retail in the airport demonstrates a singular set of market conditions that distinctively differentiates it from traditional high-street or mall retailing. The confluence of structural, spatial, and behavioral factors allows airport retailers to have high pricing power and operational advantages. Airports are controlled, regulated sites in which consumer choice is necessarily constrained. As compared to open markets, in which consumers are free to assess alternatives, passengers in the airport encounter rigorous security protocols, spatial constraints, and time constraints. These conditions limit their ability to seek substitutes, creating a so-called captive audience. Demand in retail environments in the airport thus tends to be persistently high, relatively inelastic, and less price-elastic in its responses. Together, these conditions create a commercial context that is highly conducive to the exercise of meaningful market power by retail operators.

One of the primary reasons behind this market dominance lies in the monopolistic position of retail outlets located in airport terminals. With strict security measures, spatial limits, and zoning regulations, passengers essentially become isolated from outside commercial alternatives once they have cleared the security checkpoint [10]. Retail operators hence achieve a geographical monopoly, which allows them to control the supply of essential products and services. Consumers, especially those who have suffered a delay or have a long layover, tend to indulge in convenience, perceived needs, or emotional-driven purchasing, not a cost–benefit analysis of the product or service being offered. This leaves retailers in a prime position to set premium price points on their products, levels of pricing which, in a more open marketplace, they could not achieve [11,12,13].

In addition to spatial exclusivity, the structural conditions of airport retail markets are often typified by oligopolistic characteristics, driven by both operational and regulatory constraints. The concession contracts between airport operators and retailers typically have long durations, a small number of players, and sometimes a lack of intense competition. These contracts often grant exclusive rights for specific areas or categories, e.g., duty-free or food and beverages, thus reducing the competitive forces that normally promote pricing efficiency in traditional retail environments. This then leads to a highly controlled commercial environment dominated by a small number of major tenants, characterized by uniform pricing practices and a high level of price stickiness, which is uncharacteristic in off-airport retail environments. In addition, the stability and predictability of the contracts encourage incumbent retailers to invest in experiential retail innovations, attempts to build brand awareness, as well as the introduction of technology, thus further entrenching their market positions [4,14].

Consumer behavior in airport environments plays a significant role in market trends. Passengers exhibit a high tendency to spend, driven by variables like time pressures, levels of stress, and the idea that the airport terminal is in a condition of "liminality" or transition, one that alters normal behavior. Passengers often value convenience, instant accessibility, and brand recognition above price considerations. Retail behavior in the terminal, therefore, shows a high incidence of impulse buying, particularly in locations behind security checks and around departure points, where passengers stay, on average, for a while. Empirical research shows that the performance of retail in the terminal correlates highly with footfall density and length of stay, both of which are purposefully maximized in the design and processes of the terminal [15,16]. Retailers consciously place products destined for spontaneous consumption, including snacks and publications, along travel routes in order to take advantage of this type of behavior.

The price strategies used at airports typify these exceptional situations. In the absence of transparent or easily comparable pricing norms, dynamic pricing models thrive, dependent on the real-time analysis of the makeup of passengers and the segmentation of the market. This results in high markups on high-end items, supported by perceptions of exclusivity and the low price elasticity of the target consumer group. Similarly, the pricing of convenience goods is driven not by traditional market forces but by urgency and necessity. Combinations of brand prestige, psychological reference points, and availability restriction give retailers the power to justify high price levels. Interestingly, customers no longer view these pricing strategies as negative but more likely view the context of the airport as a short-term departure from normal rational choice, hence triggering emotional discretionary spending [11].

2.2. Digital Transformation and Innovation

Digital transformation is a core determinant of the operational paradigms and airport retail opportunities. With consumer needs tending to prioritize convenience, personalization, and frictionless service, the role of digital technology in enhancing customers’ experiences and commercial performances [9] has become critical. The implementation of mobile apps, digital self-service kiosks, mobile commerce sites, and geospatial-based services has not only helped retailers overcome the spatial constraints of terminal locations but also reach passengers at multiple points of interaction. These tools support pre-ordering, click-and-collect options, and mobile payments, effectively expanding the spatial and temporal scales of retailing at the airport. Travelers can currently browse, buy, and schedule pick-ups before physically arriving in the retail space, converting the traditional point-of-sale to a dynamic, omnichannel experience [17]. In addition, analytics gathered through the digital touchpoints give retailers the ability to carry out precision marketing, delivering personalized promotions, dynamic pricing, and customized loyalty programs aligned with the traveling population’s profile. Being in a position to observe consumers’ actions, tastes, and buying history in real time transformed the engagement of the customers to a more predictive system rather than a reactive one. Personalized advertisement—often supported by the use of the airport’s public Wi-Fi, beacon technology, and notifications through the app supported by it—enables hyper-personalized engagement, enhancing conversion rates and transaction values. These capabilities not only support increased market reach by leveraging enhanced customer loyalty but also facilitate increased operational efficiencies, stock control, and more flexible demand forecasting.

In parallel, experiential retailing has become a crucial tactic to create deeper emotional connections and prolong dwell time amongst consumers. Retailers are increasingly investing in more experiential initiatives, such as pop-up concept stores, in situ brand activations, and locally curated products that resonate with cultural and sensory narratives of travel. These types of experiences efficiently turn the business of shopping into a memorable component of the passenger journey. This alignment corresponds to the larger trends of consumers seeking authenticity and emotional connection, and thus enabling the brand to differentiate and create loyalty in the captive context of the airport [18,19]. However, while the opportunities presented by the innovation of the digital space are high, the airport retail market is underpinned by structural and regulatory complexity, which presents daunting barriers to new players. Entrants must overcome a complicated regulatory environment typified by zoning bylaws, security protocols, and compliance standards that differ across different airports. Further, the financial barriers are high as retailers need to incur heavy capital expenditures to meet design specifications, fit-outs, and sustainability requirements dictated by the airport authorities. These capital investments are also augmented by the restricted availability of selling space, which is oftentimes dictated by long-term exclusivity contracts in place amongst incumbent operators.

The high level of market closure plays a crucial role in sustaining the dominance of incumbent brand names, which enjoy first-mover benefits, have secured connections with airport administrations, and are able to scale their activities efficiently. This condition supports a market structure skewed toward the hegemony of a small group of participants in every category, hence suppressing competition and limiting consumer choice [18]. Potential entrants not only need to overcome structural barriers through financial resilience but also must bring a new value proposition that differentiates them from incumbent competitors. In addition, the susceptibility of the sector to external shocks deepens the layer of operating complexity. The COVID-19 pandemic exposed the vulnerability of the airport retail system, as global travel bans led to a massive decline in the volume of passengers and both aeronautical and non-aeronautical revenues. Retail players that weathered the crisis deployed flexible, technology-driven business models that allowed them to quickly adapt to changes in the operating environment. These players retrenched to contactless payment technologies, adjusted inventory management practices, and extended product ranges in line with changing passenger tastes. The crisis reinforced the need for resilience, flexibility, and the incorporation of technology, not as differentiators but as minimum requirements to operate in the more dynamic global environment [20].

2.3. Managing Airport Retail Performance

Retail business models in the context of the airport are characterized by a striking variance in format and strategic style, but they are largely structured around a common set of contractual and economic practices that underpin their operating efficacy and effectiveness. At the center of many retail partnerships in the airport context is the concession agreement, which provides a framework that reconciles the intersections of base rent and variable revenue-sharing provisions. This hybrid structure seeks to balance the interests of the airport authority and the retail operators by guaranteeing landlords a stable revenue base while incentivizing retailers to optimize their sales performance and operating efficiency. The revenue-sharing aspect, usually a percentage of the gross sales, instills a performance dimension that encourages retailers to work hard to increase their sales and operating efficiency [21,22]. Airport retail outlets are usually located in high-traffic and highly visible locations, including post-security areas, boarding gate concourses, and terminal nodes. These spatial arrangements are informed by extensive studies of passenger flows, which guide zoning decisions, layout planning, and tenant mixes. Overall objectives include maximizing the sales per square meter and maximizing the revenue per passenger—two efficacy measures that have become the bedrock of the commercial viability of airport property. This rationale, therefore, informs leasing choices more by data on dwell time, passengers, and consumer expenditures and not by brand reputation or product offerings. Such evidence-driven policy allows the flexible allocation of space and supports high rental levels in units in strategic locations.

The use of digital technologies has dramatically changed the economics of retail at airports. Click-and-collect capabilities, mobile ordering, and pre-airport e-commerce sites enable retailers to extend the retail time horizon far beyond the boundaries of the terminal space. Passengers are able to browse, order, and pay in advance of arrival at the airport, and collection options exist at the departure gates or in the lounge areas. These technologies enable the decoupling of sales performance and spatial constraints and enable retailers to increase the points of customer engagement and reduce congestion at the points of payment in the terminal space. In addition, mobile-based campaigns and geo-location advertising can guide passengers to specific shops or bargains and increase the conversion and optimization of the entire retail effectiveness [13]. Experiential retailing also occurs as a central feature of modern business models in the airport context. Short-term pop-up shops, brand experiences, and localized cultural vignettes are deployed to capture the attention of travelers, facilitate emotional connections, and increase dwell times. These experiential formats serve both brand and commercial goals, enabling international brand presence to create enduring impressions while generating impulse purchases. As airports increasingly compete not just as transit hubs but as lifestyle and entertainment destinations, the experiential aspect of the retail play becomes essential in differentiating and building customer loyalty.

The successful management of performance in this multicomponent ecosystem requires a multi-pronged and dynamic approach. Retailers need to harmonize their strategic goals with those of the airport authorities, which generally include not only profitability but also brand standard compliance, customer satisfaction, and operational efficiency. Dynamic spatial optimization, flexible manpower levels to meet fluctuating passengers, and high standards of service through continuous employee development and instant customer feedback mechanisms account for the optimal management of performance. The consolidation of integrated operating systems covering supply chain management, inventory control, electronic engagement capabilities, and HR practices is being increasingly realized as a prerequisite to achieve responsiveness and uniformity in retail operations [6,23]. Additionally, the relationship between retailers and the airport authorities calls for a nuanced balance of control. Airport managers, though devoid of direct control of the retail activities, shape the environment through the control of brand identity, spatial boundaries, and leases. Maintaining brand uniformity, creating a diversified tenancy, and the quality control of different vendors require a flexible and methodical style of control and decision-making. Changes in consumer attitudes and travel behaviors, shaped by generational forces, technology, and changes in global mobility, require a more dynamic style of retailing. Changes in leasing practices, the choice of tenants, and in-service innovations have become the norm rather than exceptions, essential to ensure viability and profitability in the highly competitive global market [24].

Essentially, the modern airport retail business model is defined by its emphasis on performance and intense focus on innovation. It is built on a complex interplay of contractual arrangements, spatial economic theory, digital integration, and experiential brand building. Successful performance management in this model is dependent on an organization’s ability to skillfully navigate regulatory contexts, optimize operational systems, and remain attuned to the changing needs of a transient, yet increasingly sophisticated, consumer base.

2.4. Evaluation Framework for Airport Retail Markets

An integrated and effective framework for measuring retail store performance in the airport context should be underpinned by a multifaceted approach, incorporating market research, consumer insights, financial benchmarking, and regulatory assessment. Market analysis is the bedrock of strategic retail planning and requires a deep understanding of passengers’ demographic characteristics, peak flow analysis, and the projected increase in traffic. These metrics help define the size and scope of the potential customer base and guide decisions on product assortment, price models, and store location planning. Traveler segmentation by purpose of travel (business or leisure), nationality, and travel frequency allows a more precise alignment of consumer needs and retail offerings, enhancing operational salience and commercial appeal. In addition, a deep analysis of consumer behavior is of prime importance in the context of the airport retail environment. Compared to traditional retail environments, airports serve a specific consumer group defined by haste, emotional susceptibility, and high disposable income. An awareness of behavioral phenomena, like the tendency of passengers to make impulse purchases, time sensitivity, and brand loyalty, is of prime value when tailoring communication and optimizing the in-shop experience. Consumer insights shape the strategic placement of product categories, as in the placement of necessities next to gates or of prestige items in high-dwell locations, and guide the design of loyalty schemes, bundling deals, and experiential retail propositions [20,21].

Competitive analysis is another vital component, particularly given the oligopolistic tendencies within airport retail environments. Identifying dominant retailers, pricing structures, brand hierarchies, and exclusivity agreements allows stakeholders to evaluate the competitiveness of the retail ecosystem. This process helps pinpoint market gaps, such as underserved product categories or unmet consumer preferences, and provides a basis for targeted tenant acquisition and retail mix diversification. The analysis of brand positioning strategies also reveals how retail players differentiate themselves in a space where physical constraints limit the number of available units and require a high return per square meter. In parallel, economic impact assessments are essential to understanding the broader value generated by airport retail. Retail activities contribute not only through direct revenues, such as base rents and concession fees, but also through indirect benefits, including employment creation, supply chain stimulation, and enhanced passenger satisfaction. These metrics are particularly important for airport authorities and public stakeholders who must balance profitability with service quality and community impact. Furthermore, regulatory review (spanning licensing, zoning, and spatial planning) is critical given the highly structured and security-sensitive nature of the airport environment. Compliance with these regulations adds a layer of complexity that distinguishes airport retail from its high-street counterparts and must be factored into performance evaluations.

Financial benchmarking extends the analysis framework by incorporating the quantitative measures of operational effectiveness in order to generate the comparative measures of operational efficiency. Indicators like sales per square meter, average transaction value, conversion rate, and profit margins provide tangible measures of operational performance across a variety of retailers, product categories, and terminal locations. These measures enable intra-airport comparisons and external benchmarking against other airports or even best practices in retailing [6,20]. Analyzing such financial measures can shed light on the effects of strategic programs, changes in policies, or external disruptions on commercial performance. In contrast to traditional open-market retailing, the characteristic properties in the context of the airport retail setting become more obvious. Whereas retailers in high-street, mall, and strip-center locations exist in the context of open competition, dynamic pricing, and entrepreneurial nimbleness, the airport retail environment is characterized by strict regulations and controlled conditions. Obstacles to entry, arising from complex concession systems, lengthy leasing contracts, and spatial constraints, create a commercial climate of stability, predictability, and institutionalized brand management. This setting provides a safe haven for retailers in search of consistent customers and captive consumers, while at the same time, constraining potential opportunities for rapid innovation, experimentation at the concept stage, or a rapid reaction to consumer reactions [25].

However, this stability will have strategic advantages, particularly for international fashion brands that need consistent conditions in order to supply uniform customer experiences. In exchange for flexibility, retailers will have access to a high-quality consumer base, increased brand visibility, and the ability to set premium price points. But the quid pro quo is obvious: the retailing of the airport environment requires strict conformity to regulations, heavy capital investment, and a high degree of strategic alignment with airport operators. Only then will those retailers who prove themselves highly skilled at leveraging exclusivity, embracing digital technologies, and maximizing operating efficiency best capitalize on the opportunities presented by the airport retail environment.

3. Conceptual Methodology Framework

This section presents the conceptual and methodological framework employed to assess market power within airport retail environments. The approach integrates the Analytic Hierarchy Process (AHP) as the core decision-making methodology and supplements it with a pricing-oriented model of countervailing power to provide a quantifiable evaluation of retail influence. The framework is designed to capture both the qualitative and quantitative dimensions of market power, aligning with the multi-dimensional characteristics of airport retail dynamics.

3.1. Assessing Market Power in Airport Retail Using the AHP

The Analytic Hierarchy Process (AHP), as outlined by [26], is an organized method of decision-making that makes complex decision-making more manageable through mathematical as well as psychological guidelines. It is especially relevant in the context of airport retail, as the AHP assists decision-makers in balancing qualitatively unmeasurable variables such as consumer behavior and brand equity with more quantifiable elements such as technology and price. In this present research, the AHP will be used to systematically decompose the elements impacting the market power of retail facilities in airport settings. The research starts with an articulation of an overall goal: the examination of how much market power is vested in retailers in airport settings. The goal is then stated in hierarchical terms in terms of increasingly detailed concepts [6,20].

3.1.1. Step 1: Define the Objective

The first step in using the Analytic Hierarchy Process (AHP) is to define the overall objective relevant to the decision-making problem in question. The main objective in this research is to evaluate the comparative market power of companies in airports. The objective is the foundation for the AHP hierarchy and guides the choice of appropriate evaluation factors. It is important that the objective is clearly defined to ensure that all subsequent comparisons and analyses align with the overall research question, thus maintaining both the relevance and logical structure of the hierarchy.

3.1.2. Step 2: Identify Criteria and Sub-Criteria

In accordance with the research aims, the next phase is to identify relevant criteria affecting market power. In the context of this research, those established criteria include consumer behavior, brand equity, technological integration, pricing power, and competition. Such criteria are then categorized under sub-criteria to cover more specific impact areas. The indicators of pricing power include being able to charge premium prices as well as being able to use dynamic pricing techniques. Consumer behavior measures how often consumers use impulse buying, join loyalty schemes, and are responsive to convenience. Competition measures how many players are present in the marketplace, whether exclusivity deals are in place, and how easily selling locations are accessed. Brand equity measures the levels of brand awareness, as well as whether such awareness can lead to customer loyalty. The role of technological integration is to consider how technologies involved in mobile interaction, pre-order functionality, and marketplace functionality in real-time impact the marketplace. Using such suitable sub-criteria in this way, the framework put forward in this work is able to capture the multifaceted nature of airport marketplaces.

These decision criteria and sub-criteria are diagrammatically presented in Figure 1 in the hierarchical model utilized in the AHP for determining airport retail market power. The diagram first lays out the top-level objective and breaks it down into five primary evaluation criteria. Every criterion is next disaggregated into applicable sub-criteria that respond to specific areas of influence. The hierarchical decomposition captures the analytic logic driving the subsequent pairwise comparisons to facilitate a structured analysis of both tangible and intangible elements that affect market power.

3.1.3. Step 3: Construct Pairwise Comparisons

Following the setting of criteria and sub-criteria, the subsequent step is to perform pairwise comparisons. This technique requires engagement from stakeholders, in this case, airport managers, retailers, or industry experts, who must compare two criteria with one another in order to identify which criterion is more important in view of the stipulated objective. A standard numeric range from 1 to 9 is used, with rating 1 meaning identical importance and rating 9 meaning a clear preference toward one criterion over another. Every comparison is mutual; by way of illustration, if pricing power is assessed as being moderately more important than consumer behavior with a rating of 3, then consumer behavior is assessed as being 1/3 in the mutual matrix. The pairwise comparisons are then represented in a comparison matrix, which is used as a base for quantitative analysis. The matrix is extensive in nature, meaning all criteria are considered with every other criterion. Where five criteria are involved, this would mean ten pairwise analyses. The task is repeated at all levels of sub-criteria in the hierarchy. The coherent elicitation method converts subjective expert judgments to quantitative inputs.

3.1.4. Step 4: Calculate the Weights and Consistency Ratio

Step four involves the extraction of priority weights for all sub-criteria and criteria based upon the principal eigenvector method. The normalized comparison matrix is then created by dividing elements in a column by the total in that particular column and then by computing row averages to obtain the priority vector. The vector outlines the relative importance of every criterion with regard to the overall goal. To test whether pairwise rankings are reliable, matrix consistency is examined through use of the Consistency Ratio (CR). The CR is then calculated by dividing the Consistency Index (CI) of the matrix by the Random Consistency Index (RI) for the matrices of similar dimensions. A CR below 0.10 is generally accepted to signify that the rankings are consistent. If the CR is higher, then the decision-maker is required to reassess and revise pairwise comparisons to achieve rationality.

3.1.5. Step 5: Aggregate and Synthesize the Results

In this step, priority weights derived from different hierarchical levels are combined to produce a composite priority evaluation for every alternative belonging to the considered retail sectors or categories. The synthesis process involves multiplying local weights assigned to sub-criteria by the respective parent criterion’s weight, then adding these products across the entire hierarchy. This process ensures that an aggregate composite represents the overall market power of every alternative considered. The derived scores can then be ranked to determine which companies have greater market power based upon the combined impact of all considered factors. The synthesis process makes comparison easier to help airport managers and stakeholders identify outstanding performers, detect competitive weaknesses, and select priorities for strategic initiatives.

3.1.6. Step 6: Conduct Sensitivity Analysis

The final step in the AHP is to perform a sensitivity analysis that measures the robustness of results under varying circumstances. It involves adjusting the importance of the main criteria and tracking changes in the overall rankings. The sensitivity analysis is particularly useful in situations where there is uncertainty or volatility involved, like in airport retail, where various factors such as fluctuations in footfall, changes in regulations, or technological advancements may impact the assumptions.

By analyzing how aggregate rankings react to changes in input variables, decision-makers are given useful insights into the robustness of their conclusions and are able to identify which criteria have the greatest impact on outcomes. Knowledge in this area is used in risk management as well as in scenario planning methodology. Finally, the use of the AHP in analyzing market power in the context of airport shopping malls offers an explicit, structured, and logically sound method for addressing complex, multi-dimensional decision-making problems. The technique allows for evidence-based strategy formation by combining expert judgment with mathematical rigor to generate useful recommendations for optimizing competitive positions in airport shopping malls.

3.2. Quantitative Modeling of Pricing Power

In addition to the qualitative approach provided by the AHP, this entry incorporates a quantitative model to assess the pricing dimension of market power through the concept of countervailing power. This model evaluates the economic leverage that a retail enterprise holds in its relationship with an airport authority. It builds upon the foundational principle that power in a market is not absolute but relational; it depends on the relative dependencies of each party. The Countervailing Power Assessment (CP_A/E) model is constructed to reflect the degree of influence an enterprise (E) has at a specific airport (A). It is calculated using the following formula:

$${\mathrm{C}\mathrm{P}}_{\mathrm{A}/\mathrm{E}}={\mathrm{P}}_{\mathrm{E}}\ast {\mathrm{M}\mathrm{S}}_{\mathrm{A}/\mathrm{E}}\ast (1-{\mathrm{M}\mathrm{S}}_{\mathrm{E}/\mathrm{A}})$$

(1)

where

${\mathrm{C}\mathrm{P}}_{\mathrm{A}/\mathrm{E}}$ is the countervailing power of enterprise E at airport A;

${\mathrm{M}\mathrm{S}}_{\mathrm{A}/\mathrm{E}}$ represents the market share of enterprise E at airport A;

${\mathrm{M}\mathrm{S}}_{\mathrm{E}/\mathrm{A}}$ is the proportion of airport A’s contribution to the enterprise’s overall market exposure;

${\mathrm{P}}_{\mathrm{E}}$ is a firm-type coefficient that varies based on the geographical reach of the enterprise, with P_E = 1.00 for local firms, 0.75 for national firms, 0.50 for firms active in multiple airports, and 0.25 for international firms.

The rationale behind this formula is to provide a weighted measure of influence, recognizing that a local enterprise with a large share in a single airport may exert significant influence, while an international brand, despite strong local performance, may have diminished dependency and therefore lower countervailing power in that specific setting. The expression (1 – MS_E/A) effectively measures how indispensable the airport is to the retailer, with lower dependency granting greater negotiating strength. The conceptual framework of the Countervailing Power Assessment model for reflecting the degree of influence an enterprise (E) has at a specific airport (A) is presented in Figure 2.

Additionally, a consumer-focused index is proposed: the Market Power to Passengers at Airport A (MP_E/A). This indicator reflects the retailer’s dominance in the local retail landscape and is defined as

$${\mathrm{M}\mathrm{P}}_{\mathrm{E}/\mathrm{A}}={\displaystyle \frac{{\mathrm{S}}_{\mathrm{E}/\mathrm{A}}}{{\mathrm{S}}_{\mathrm{E}/\mathrm{A}\mathrm{R}}}}$$

(2)

where

${\mathrm{S}}_{\mathrm{E}/\mathrm{A}}$ is the sales of enterprise E at airport A;

${\mathrm{S}}_{\mathrm{E}/\mathrm{A}\mathrm{R}}$ represents the enterprise’s total sales in the surrounding airport region or catchment area.

The MP_Ε/A ratio provides an understanding of the degree to which the airport-based retail operations dominate a firm’s regional market footprint. A high ratio implies a strong captive audience effect, further supporting pricing flexibility and premium service offerings. It is particularly useful in evaluating the strategic importance of airport locations within an enterprise’s broader distribution network.

Both models offer quantitative insights by which the degree of pricing and strategic control a retailer can impose in the airport setting can be measured. These measures are especially applicable to the context of concession agreement negotiation, strategic placement planning, and performance measurement. Through the inclusion of these quantitative measures along with the AHP technique, this method ensures a more balanced and evidence-driven understanding of market dominance. It brings the structural circumstances of the retailing in the airport, including exclusivity contracts and pedestrian foot flows, into alignment with measurable business outcomes, including the distribution of sales and dependence ratios. This integrated approach facilitates the development of more synchronized, data-driven strategies by airport managers and retail companies in order to attain a sustainable competitive advantage. The strategic positioning Matrix of airport retail market power based on Enterprise and Passenger Dependency is presented in Figure 3.

The above graph shows a bivariate strategic positioning matrix using two measures of market power in order to compare the relative influence exerted by commercial enterprises and airport authorities in the case of airport retail activities. Along the x-axis (CP_A/E), the countervailing power of the enterprise in a given airport is measured, reflecting the degree of bargaining power extracted by the enterprise in comparison to the airport authority. This axis is driven by the size of the firm’s market in the airport as well as its general dependence on the airport when it comes to total revenues. A high CP_A/E indicates greater bargaining force by the enterprise, either due to a smaller dependence on the airport or a high contribution to the commercial revenues of the airport. On the contrary, the y-axis (MP_E/A) measures the market power of the enterprise in regard to passengers and is computed as the ratio of the enterprise’s sales in the airport to its sales in the surrounding catchment area. This measure shows the proportion of customers that are the enterprise’s primary customers in the airport, reflecting high dependence upon the passengers in the airport and a captivity effect, whereby the supplier base is faced with limited options, allowing the retailer to reap the benefits of exclusivity and increased price elasticity.

The iso-power lines, which are traced by their curves, mark the boundaries of equivalent market power, just like the role of indifference curves in a utility–theory context. They mark a given level of collective market power, ranging from “very limited” to “very high”, depending on the trade-off in the relation of CP_A/E to MP_E/A. Analytically, the curves depict a nonlinear, inverse relationship: changes in one variable (e.g., CP_A/E) will balance opposing changes in the other variable (e.g., MP_E/A) to maintain the constant total levels of power.

The colored segments along the MP_E/A axis introduce a governance interpretation:

• The green zone reflects enterprise control, where retailers dominate the relationship due to strategic independence and a limited reliance on airport-driven footfall.
• The yellow zone denotes a collaborative equilibrium, where power is relatively balanced, and mutual value creation through partnerships is feasible.
• The red zone indicates airport control, where enterprises are more dependent on airport operations, infrastructure, and policy decisions for their financial performance.

Empirically, each plotted point corresponds to an airport-based enterprise, revealing the heterogeneity in power dynamics across different market actors. This dual-indicator model thus enables a multi-criteria, data-driven assessment of market power, aligning with principles from industrial organization economics, transaction cost theory, and resource dependence theory. It is particularly useful for strategic planning, concession agreement design, and regulatory evaluation within the non-aeronautical revenue structures of airports.

3.3. Integration of the AHP and Quantitative Metrics

The integration of the AHP model and quantitative models of pricing power provides a robust and multi-dimensional method of analyzing market influence in the context of retail areas in airports. The combined methodology successfully marries subjective judgments by the management with objective, data-driven analysis, thus providing solid theoretical underpinnings that facilitate both operational decision-making and strategic planning processes. The AHP framework excels in integrating expert judgments, strategic goals, and hierarchical attitudes. The framework allows decision-makers to analyze qualitative, non-measurable factors such as consumer behavior, reputation, and technological progress through organized comparative techniques using numeric weighing. By weighing these factors, one is able to build an entire relative hierarchy of market dominance among retailers, ultimately producing an orderly and rational analytic framework.

Alternatively, using quantitative modeling based on CP_A/E and MP_E/A measures supports the development of a data-driven analytical framework involving past sales data, market share projection, as well as dependency ratios. Such measures capture the economic and structural forces underlying interfirm relationships between retailers and airports, thus enabling the identification of the circumstances of asymmetric dependency, as well as inequalities in bargaining power. For example, a high CP_A/E value will probably indicate that the high degree of influence of one firm lies in a minimal dependency on airports, with a huge revenue contribution from airport sales, thereby generating greater bargaining power in negotiations of contractual agreements. Likewise, high levels of MP_E/A indicate a high relative contribution to regional firm revenues from airport sales, which would imply the dominance of market share in circumstances of captivity in markets.

The synthesis of these two approaches allows for triangulation, cross-validating findings, and minimizing bias or analytical blind spots. Where the AHP captures strategic importance, the pricing model offers performance validation. For instance, if a retailer scores highly in the AHP due to strong brand equity and technological integration, but has a low CP_A/E score, this could signal that its perceived strength is not matched by its economic leverage, prompting a reevaluation of the pricing or location strategy. Practically, this integration is valuable for a range of stakeholders. For airport authorities, it aids in designing differentiated concession terms based on retailer profile and contribution. For retailers, it provides a diagnostic tool to assess their standing and identify areas for improvement or investment. For regulators and policymakers, it supports a more nuanced understanding of competition and market power in highly controlled environments like airports.

In addition, the suggested integrated framework displays both scalability and flexibility characteristics. It is applicable to different sizes of airports, geographical settings, and temporal conditions, such as phases of crisis recovery, like operations post-pandemic. In addition, it supports benchmarking across various airports or retail segments, allowing for the determination of best practices and strategic gaps. Together, the synergistic combination of the AHP and quantitative modeling yields a powerful methodological toolkit for the assessment of market power in airport retail settings. This approach balances strategic foresight with empirical evidence, yielding an encompassing, multifaceted, and practical framework that meets both academic soundness and practical feasibility. This integration forms the foundation of a performance-driven and resilience-oriented airport retail system, attuned to the demands of passengers and stakeholders.

To enhance the applicability of the framework for strategic decision-making, a synthesized, executive-level representation of the key assessment dimensions is presented in

Table 1. Executive-oriented dashboard for strategic assessment of airport retail market power.

Functional Area	Key Dimension	Decision Use	Sample Metrics/Inputs
Strategic Influence	Brand Equity	Assess visibility, loyalty potential, and value of retail brand	Brand recall, loyalty card use, and repeat purchase rate
	Technological Integration	Evaluate digital capabilities that drive engagement and flexibility	Mobile transactions, click-and-collect usage, and tech investment level
Operational Performance	Pricing Power	Determine ability to charge premiums or adjust to demand	Markup ratios, dynamic pricing usage, and pricing flexibility score
	Footfall Productivity	Benchmark revenue generation per passenger and per m2	Sales/m2, transaction count, and average spend per passenger
Risk and Resilience	Passenger Dependency	Understand retailer reliance on captive passenger flows	MPE/A ratio (airport vs. regional sales) and CPA/E score
	Geopolitical/Pandemic Sensitivity	Anticipate external disruptions and need for contingency planning	Sensitivity analysis scores, COVID-19 impact delta, and scenario risk index

. The results obtained through both the quantitative modeling elements and the Analytic Hierarchy Process (AHP) are organized in an efficient and streamlined framework categorized by strategic influence, operational performance, and system risk. The identified factors are directly associated with the underlying criteria defined within the AHP hierarchy (for example, price power, technological integration, and consumption patterns), as well as the structural interdependence embodied within the CP_A/E and MP_E/A indices. Each category includes representative decision applications and measurement criteria that support evidence-based airport retail operations management. The table serves not only as a streamlined manager’s dashboard but also as a structural overview of the model’s multi-dimensional analysis, hence facilitating its use in benchmarking activities, contract planning, and resilience evaluation in the face of unstable market conditions.

4. Discussion

The market power analysis in the context of airport retail environments requires a holistic methodological approach that adequately balances qualitative strategic factors and quantitative market factors. In this entry, a two-layered methodological framework, the AHP, coupled with a set of purpose-developed quantitative models to measure price power, was applied to examine the strategic implications and effects of retail activity in the airport environment. This integrated framework not only acts as a diagnostic mechanism but also operates as a decision-support mechanism for managers, operators, and policymakers in high-stakes, high-traffic commercial environments. The AHP component of the framework allows the breaking down of the intricate and nonlinear properties of market power into a systematic hierarchy of criteria and sub-criteria. The major determinants of pricing flexibility, consumer needs, competition, brand reputation, and technology integration are thoroughly examined through expert views in order to develop relative weights [26]. These weights enable decision-makers to allocate the areas of strategic priority in line with the empirical appraisals of their impacts. This method’s efficacy lies in its ability to integrate subjective knowledge and mathematical sophistication, ultimately arriving at a reliable, logistically sound model that can facilitate strategic planning, retail mixture optimization, and infrastructure development.

Building upon this baseline framework, the Analytic Hierarchy Process (AHP) model incorporates advanced functionalities specific to contract negotiations, performance management, and policy analysis. This model supports data-driven, mutual agreement formulations by allocating priorities to essential contract elements, such as lease conditions, exclusivity provisions, and rent related to performance [26]. In the context of performance management, the AHP model provides a comparative analysis of revenue contributions, customer satisfaction scores, and operating efficacy to identify instances of underperformance and guide remedial action [6,13,20]. In the context of policy analysis, the AHP retains the ability to assess the projected effects of novel pricing policies, loyalty schemes, or efforts at digitization in terms of their contribution to general market power and business resilience [6]. To complement the qualitative insights provided by the use of the AHP, this entry draws upon a quantitative framework based on countervailing power to pricing. Importantly, this framework contributes to and extends the existing literature through its integration of behavioral and structural variables within a unified model. For instance, Ref. [1] examined hub airport market power through regulatory and fare-based pricing benchmarks. While informative, such methods lack granularity on retailer-specific performance and strategic behaviors. In this paper, the use of the AHP incorporates qualitative dimensions such as loyalty, exclusivity, and brand strength—factors absent in price elasticity analyses. Similarly, the assessment methods proposed by [4] focus largely on structural dominance and competition assessments at the sector level. By contrast, the present model accounts for micro-level dependencies and enterprise heterogeneity through CP_A/E and MP_E/A ratios, offering a more localized and actor-specific diagnostic tool.

The findings also align with and extend empirical studies on passenger behavior and airport retail layout. The authors of [14] emphasized the significance of spatial design and terminal layout in stimulating impulsive purchases. In this entry, the inclusion of footfall productivity and consumer behavior as the AHP criteria formalizes these behavioral insights into a decision-making structure, adding weight-based prioritization to previously descriptive relationships. Furthermore, the emphasis on technological integration as a critical factor mirrors the findings of [5], who highlight digital engagement as a post-pandemic differentiator. This model builds upon their conceptual arguments by operationalizing digital readiness as a measurable dimension within the AHP structure.

In conclusion, the combined use of the AHP and quantitative modeling provides a powerful and versatile methodology for assessing and managing market power in airport retail environments. It enables a structured, evidence-based approach to strategic decision-making that accounts for both qualitative factors, such as brand perception and consumer behavior, and quantitative realities, such as market share and revenue dependencies. This integrated framework supports more effective business model development, contract structuring, and performance evaluation, while enhancing transparency and resilience within airport commercial ecosystems. As airports continue to evolve into multifunctional commercial nodes, the ability to accurately assess and strategically leverage market power will be essential for long-term sustainability and a competitive advantage.

The framework’s robustness is also boosted through the integration of dynamic external threats that profoundly affect the airport retail environment. Geopolitical changes in the form of international conflicts, trade restrictions, and changes in aviation diplomacy can lead to sudden disruptions in passenger flows, modify bilateral air traffic rights, and complicate the global retail supply chain. Such changes infuse uncertainty in demand prediction and retail planning, especially for international brands and duty-free retailers [24,25]. At the same time, pandemics, as the COVID-19 crisis has demonstrated, can immediately suspend air travel, deplete non-aeronautical revenue streams, and force retailers to adopt crisis-driven innovations such as contactless shopping, responsive inventory planning, and digital pre-ordering systems [9]. The long-term implications of such health crises have highlighted the need for malleable retail models and technology-driven interaction. Additionally, shifting passenger demographics in terms of a rise in young, technology-savvy travelers amidst an aging population are altering preferences and spending patterns. Studies show that digital interaction, experiential formats, and cultural relevance are increasingly crucial in meeting the needs of Generation Z and millennial travelers, whereas ease and convenience remain essential for older age groups [12,14,15]. These macro-level trends can be integrated within the AHP framework through the use of scenario planning and sensitivity analyses and thus provide strategic resilience against external shocks and changes in consumer demographics.

5. Conclusions and Prospects

This entry has presented an integrated analytical framework for the evaluation of market power in the airport retail context through the combination of the AHP and quantitative models, emphasizing countervailing and consumer-driven pricing power. This composite methodology has been effective in tackling the perceptual and empirical aspects of strategic influence, thus providing a multifaceted perspective on the power exertion and distribution dynamics among the different stakeholders in airport retail systems. The use of the AHP methodology has enabled the systemic and structured evaluation of qualitative variables of critical significance, such as pricing power, consumer behavior, competition, brand equity, and technological integration. Through pairwise comparisons by experts and the use of consistency checks, this methodology has provided weighted priorities, thus improving decision-making processes that are informed, transparent, and justifiable. In addition, this has demonstrated flexibility for various strategic uses, such as performance measurement, contract negotiations, benchmarking, and policymaking.

In parallel, the confluence of the CP_A/E and MP_E/A quantitative indicators has created a systematic approach based on financial and spatial variables, hence enabling a comprehensive analysis. These indicators clarify the bargaining balances and economic interdependencies between retailers and airport authorities, highlighting differences in control and vulnerability. In addition, the graphical representation of the relations improves the visual knowledge of power relations, hence enabling scenario appraisals and comparative studies across markets and players. Overall, this combined method provides a flexible and scalable set of tools for players in the airport retail market. It helps the authority in the planning of concessions and commercial zoning, as well as in supporting retailers in informed decision-making concerning flexibility in price, targeting customers, and spatial priority. It also opens up areas of study by researchers and regulators to further examine the competition and robustness of aeronautical revenue models at the airport, supported by a precise empirical analysis.

When considering potential fields of research and practical use, a variety of opportunities present themselves. Broadening the available dataset to include many international airports might increase the external validity of the model and support cross-regional comparison. Secondly, the inclusion of time-series data will support a dynamic analysis of market power through the passage of time, reflecting variations due to seasonality, global shocks, or changes in regulations. Lastly, the integration of the present framework and simulation approaches or the use of machine learning algorithms might support predictive power and the development of flexible strategies. Finally, the growing salience of digitalization and sustainability in the fields of aviation and retail further supports the potential to complement the present model by including new parameters of ESG (Environmental, Social, Governance) performance, digital consumer markets, and carbon-neutral retail logistics [27,28,29,30]. These reflections will resonate with passengers’ and airports’ growing concerns, and the analysis of market power will stay in line with the insights of creating value in the longer term and responsible development.

In conclusion, the framework presented is strong in both theoretical and practical insights toward analyzing market power in the airport retailing context, providing a model that is theoretically sound and practically relevant to decision-making, successfully addressing current challenges, while being amenable to future refinement. As the airport retail landscape evolves, theory acts as a vital tool in coping with complexities, driving value, and enabling strategic alignment among the primary stakeholders.