Ontario duty free stores have banded together as a buying group to have a stronger voice with its supplier partners and the Ontario Liquor Board.
Chris Foster, who heads the group and owns Queenston-Lewiston Duty Free in Niagara Falls, Canada, tells TMI that the combined weight of its Ontario members has had a positive impact in its interactions with the government agencies.
“It is harder for us to compete with (as) single individual locations. So together we have a bigger voice when having conversations with suppliers. The idea behind the group is that we all have the common thread of having to deal with the Ontario Liquor Board, all of our liquor runs through that government agency. It made a lot more sense to have a smaller subgroup of operators in the group. And it’s helped us in dealing with the liquor boards, as well as government lobbying, and dealing with the province,” says Foster.
“We’ve also been able to manage to get in front of certain government officials to educate the government about duty free.”
Going Local
The Ontario buying group has brought in many local craft wines, spirits, and beer to its locations.
“In Ontario we are currently dealing with 48 craft distillers, and 379 products that have been listed as of October 2022 in all of the land border stores with the exception of one, as well as the airport,” says Foster.
“We’re constantly adding new suppliers that were not involved in the original program. We’re also unfortunately listing some products that may not be as effective as some of the other ones. It’s amazing because the products range from ready to drink products like coolers and seltzers, to beers and ciders all the way up to vodka, gin, and whiskey.”
Despite the influx of new products, Foster tells TMI that sales in his Niagara Falls land border duty free store are still down 20-30% versus 2019.
In fact, sales across Canada’s land border stores still remain down an average of 20-30% versus 2019.
“There are small changes. I think that some of the stores were 30 to 40% down last year. Maybe some people thought it would change much quicker. But the reality is that there are some land border stores that belie they are not going to get back to 2019 numbers for five years.”
One positive sign for recovery is that the customers that do shop are spending more.
“The interesting thing is when you compare our business to our traffic and our crossings there is definitely not a consistent correlation between the two. We’re seeing less traffic crossing the border these days. But our sales are performing better because we’re having more people spending more money in the stores. Also, our premium offerings are up and our average sales per customer is up. Get the traffic to return then we’re going to be in a very positive situation.”
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Queenston-Lewiston Duty Free
Foster’s Queenston-Lewiston Duty Free store has just started a renovation of the shop that will expand its retail footprint by 2,000 square feet.
“We are always evolving. Unfortunately, Starbucks for us never survived COVID. So we are claiming that space for retail, and we have a major facelift going on. We just put the holding wall up today, and putting in a new cash area, redoing our front entrance, changing our flow of traffic,” says Foster.
“We’ll be able to expand our fragrance and perfume and cosmetics area. We’re going to shift some product categories around and we’re going to be able to add to the product categories that we’re seeing trending up. So tequila, American whiskey, scotch, all those categories are going to see some healthy increases in space.”
The new construction will also change the flow of the store.
“One of the challenges we have is that people come in to the store just to use the restroom facilities and they may not necessarily want to shop in the store. So what we’ve done is we’ve designed the new store to push all those customers that are using the restrooms onto the retail space.”
Foster and Queenston-Lewiston must be doing something right. The store won the 2023 FDFA Gold Standard Platinum Award Category B, and Foster was honored with the Outstanding Contributor Award.
