Why is Airport Food So Expensive?

Posted on Jul 24, 2019

The Hustle recently analyzed various goods in 4 airports (SFO, LAX, JFK, PDX) and found markups as high as 200% above street price.

They explained that the higher costs that you pay for goods in an airport can be attributed to a minutiae of operating expenses most customers never think about:

– High rent (airports take a % of total sales)
Instead of charging a monthly rent, airports typically take a percentage of total sales, close to 8-12%. This can be hefty cost for a small business, even one in a high trafficked location.

– High construction costs
According to The Hustle, cost per square foot to build out in an airport ranges from about $450/sf to $2k/sf [compared to the national average of $56/sf].

– Steep security, handling, and logistical costs
Anything and anyone that enters an airport must go through security. The costs of dealing with the post-911 security measures can quickly add up, such as the added time for employees to get in and our of security as well as the additional time required for employees to perform security precautions such as counting the knifes multiple times per day.

– Costly labor (higher average salaries than traditional retail jobs)
Many airports jobs are unionized and require that employees be paid an average of $2/hr over the average wage for similar jobs outside of the airport.

The hidden costs of running an airport business show that it’s more then just “runway robbery”. Each of these extra costs are factored into the price of goods purchased at an airport. Giving us a better understanding as to why that bottle of water costs $4 instead of $2.



Click here to view the full article from The Hustle.