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As 2012 draws to a close, the international duty free and travel retail business once again demonstrates its resiliency. Despite an overall slowing growth rate in air passenger travel (see ACI report on page 4) and widespread economic, political and environmental challenges throughout the year, global sales will be “nudging US$50 billion,” says TFWA president Erik Juul-Mortensen.
Most importantly, people keep traveling. At the projected pace of growth, arrivals will pass the 1 billion mark this year, up from 940 million in 2010, predicts the World Tourism Organization, who says that arrivals could reach 1.8 billion by 2030.
To use the United States as a barometer of consumer confidence, the holiday shopping season has gotten off to a solid start. According to the retail trade association National Retail Federation, which represents retailers of all types and sizes from the United States and more than 45 countries abroad, November retail sales (excluding automobiles, gas stations and restaurants) increased 0.8 percent seasonally adjusted from October and increased 4.4% unadjusted year-over-year.
Citing “stable employment rates, lower gasoline prices and a recovering housing market,” the NRF expects holiday sales to grow 4.1% over last holiday season, despite the impact of Hurricane Sandy on the Northeast and worry about the pending “fiscal cliff.”
Among the leading stories this week, Erik Juul-Mortensen, who was re-elected president of Tax Free World Association last week, speaks with TMI about some far-reaching plans underway to develop a new, global organization to represent the industry. He presents a compelling argument about the need for such an independent, permanent entity, that he says could fill a number of roles.
Uruguayan travel retailer Neutral is also in the news, as it opens its first GAP store in Montevideo and announces it has lined up two other major brands for exclusive sales and distribution in the country. The GAP store that was inaugurated last Friday is Neutral’s first domestic market operation, but at least 7 more outlets are planned, both in duty free and domestic locations. Story on page 2.
In other news, Autogrill’s World Duty Free Group sweeps Spain’s airport concessions; L’Oréal opens the world’s largest hair color production plant in the world in Mexico; and Diageo will relocate its Americas operations now in Miami to a new location in Coral Gables.
On the product side, Beam’s Casa Sauza releases a rare limited edition añejo expression that will be available in duty free globally.
Congratulations to Nuance & DFASS, the JV officially opened two new stores in Orlando International Airport on Tuesday. TMI will present a full story in the next issue.