As the TFWA World Exhibition in Cannes draws to a close today (23 September), here are some facts on duty free and travel retail to ease you through your journey home and bore your friends with when you get there.
- The terms ‘duty free’ and ‘travel retail’ refer to the commerce conducted at airports, on airlines, on ferries, on cruise-lines and at border stores between travelling consumers and suppliers of a range of goods that includes fashion, confectionery, electronics, alcohol, tobacco and fragrances.
- This commerce does not attract duty or local taxes – except for consumers travelling on intra-EU journeys – because the goods are sold in international territory beyond the national frontier.
- The first duty free outlet was opened at Shannon Airport in Ireland in 1947 to serve trans-Atlantic airline passengers travelling between North America and Europe while they were in transit. The Irish argued that, having passed passport control, the passenger had left the country and therefore the duties and taxes of that country were no longer applicable.
- Today, it is estimated that, on average, almost 50% of an airport’s revenue comes from non-aeronautical businesses.
- The duty free & travel retail (DF/TR) channel relies on a ‘trinity’: A relationship between the airport authority, which owns and runs the airport, retailers, which run the shops, and suppliers of the goods for sale.
- The world’s top ten DF/TR retailers represent 51% of sales in the channel. The top 50 account for 78.8% of sales.
- Airports account for 59% market share for sales. The top ten airports by international passenger traffic, according to The Moodie Report, are London Heathrow, Paris Charles de Gaulle, Hong Kong International, Dubai International, Frankfurt, Amsterdam Schipol, Singapore Changi, Seoul Incheon, Tokyo Narita and Bangkok Survanabhumi.
- Dubai is the top airport for DF/TR sales, followed by Seoul, London, Singapore and Hong Kong.
- ‘Luxury goods’ – fashion, gifts, electrical, etc) account for 36% market share, followed by fragrances & cosmetics with 31%. Wine & Spirits come in third, with 17% market share.
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