Due to the lack of tourists at the airports since early March, duty-free stores have faced massive losses.
Based on the results of the first half of 2020, one of the largest duty-free store operators in Europe, Gebr. Heinemann, who manages more than 300 points of sale in 74 airports around the world, claims a sharp drop in sales. The decline in sales by 60 percent is unprecedented for the industry.
It was noted that the half-year decline in sales occurred despite the good results for January and February. At the same time, from March to May, the income of duty-free stores fell almost to zero. As of July 2020, when travel restrictions were partially lifted in many countries, retailer turnover was 75% lower than in July 2019. And based on reasonably slow growth in tourism activity, the second half of 2020 is projected to be much lower than the same period in 2019.
The company is taking several measures to preserve its business, including reducing costs, developing the digital sphere, reviewing investments, providing liquidity, and more. Gebr. Heinemann also plans to take advantage of regional differences in the recovery indicators of the buyer activity, pointing to airports in Russia and Turkey showing strong enough stability to avoid a crisis. Russia, in particular, shows the potential for earlier growth of luxury goods sales. Many Russians, who often earn their money Duty-Free, although they refused to take vacations abroad, continued to fly inside the country.
Other major Duty-Free market players, such as Dufry and Lagardère Travel Retail, report the same disappointing situation. The duty-free industry around the world, especially in Europe, has become one of the most affected by the pandemic. Considering the unprecedented situation, the representatives of the sector are tuned for a long recovery. According to Max Heinemann, CEO of Gebr. Heinemann, who leads Forbes: "The road to recovery for the tourism market will be very long. We are talking about years, not months."
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