Differentiating the travel retail market from the high-street
ETRC believes that recognising the uniqueness and importance of the duty free and travel retail market is the first step to unlocking the true potential of the Duty Free and Travel Retail industry.
Duty Free and Travel Retail has long been acknowledged as a market which is unique and distinct from the domestic retail market. Access to travel retail is restricted to those who are travelling and in possession of a boarding pass.
These areas are located beyond security or immigration controls at airports and ports, as well as sales made on board aircraft and on board ferries and cruise ships, where both duty/tax free and duty/tax paid sales of consumer goods are made to travellers.
Duty free and travel retail shops are therefore not in direct competition with the domestic market; rather they compete with each other across international borders.
A limited and often exclusive product range is on offer, from luxury goods to perfume. Notably, the brands on offer at duty free and travel retail are predominantly brands with a European heritage.
Sales from airport duty free and travel retail stores generate an important stream of funding for airports. This funding is in turn re-invested in airport infrastructure and operations for the benefit of all passengers.
For European SMEs, this specific market provides a unique opportunity to profile themselves to an international customer base and expand rapidly into new markets. It has enabled and continues enabling local producers to develop into global brands.
Strict application of EU and national legislation poses significant barriers to entry for new products, particularly SMEs and local producers. ETRC advocates adapting existing legislation to better serve the international marketplace and creating specific rules tailored to the needs of the travel retail channel in new legislation.
ETRC is promoting greater awareness of the uniqueness of our industry and seeks to ensure that future legislation does not hinder or damage the industry but promotes growth and innovation ultimately for the benefit for all travellers within the EU.
Impact of COVID-19 on the Duty Free and Travel Retail channel
The Duty Free and Travel Retail sector has been severely impacted by the unprecedented COVID-19 pandemic. The imposition of travel restrictions across EU Member States and beyond has led to significant drops in passenger numbers in aviation and maritime transport traffic, resulting in dramatically lower turnover for travel retailers and lost sales for suppliers operating in this channel.
ETRC has been working with industry partners and members to call for targeted measures and financial support for the industry in order to initiate recovery, with staff and passenger health and safety as our priority. Best Practice Guidelines on practical measures recommended in the wake of COVID-19 were elaborated by ETRC to ensure travel retail remained a safe part of the travel experience.
As the industry is still recovering from this challenging period, ETRC encourages the EU to look at innovative ways to sustain the financial sustainability of the EU tourism and travel sector, including an opportunity like Arrivals Duty Free which can drive growth and help build income for EU airports, governments, retail operators and brands.
