TFWA: ‘meaningful’ data needed for industry’s survival

Global travel retail sales rebounded in 2016, but TFWA president Erik Juul-Mortensen has warned that the industry needs “meaningful and accurate data” if it is to succeed in the future.

Erik Juul-Mortensen, president of the TFWA

At the Tax Free World Association (TFWA) World Exhibition & Conference in Cannes last week, Juul-Mortensen revealed data from Generation Research showing that in 2016 GTR sales grew 2.4% to US$63.5 billion.

This marked a “significant improvement” on 2016, when the GTR industry saw its first year-on-year sales decline in six years. Sales fell 2.7%.

Within the channel in 2016, the fragrances and cosmetics segment performed the strongest, witnessing 9.2% year-on-year growth. In terms of sales by channel, the strongest performer was ‘other shops’, which grew by 7.3%.

Asia Pacific recorded the most rapid growth in 2016, when sales increased 8.2%. However, Juul-Mortensen noted that “pressure on the luxury segment continues” across GTR.

The first quarter of 2017 also “showed some momentum”, noted Juul-Mortensen, with sales up 4.2%.

During the opening conference of the TFWA World Exhibition & Conference, Juul-Mortensen said the TFWA takes the need for “meaningful and accurate” data “extremely seriously”, adding that the association has been “frustrated by the fact this need is not always universally acknowledged”.

“In my view, this must change if we are to make progress as an industry together,” he commented. “Not an easy expectation, I know, in a concession driven industry like ours where sales data is exceptionally sensitive. But unless we find a solution we could end up with nothing.”

Juul-Mortensen also warned of “unsustainable commercial agreements” between brands, retailers and landlords.

“As the saying goes ‘turnover is vanity, but profit is sanity’,” he said. “Brands are not in this business for vanity’s sake and at the minute the expected share of cost can test our sanity. And I also acknowledge the demands on retailers are often unrealistic.

“There is so much being done right in this industry but we are still failing to ensure the cost and reward in this industry are shared more appropriately. This cannot continue indefinitely.

“Fault lines will occur and ultimately airport retail will lose its momentum as global brands finally decide to walk away from the market.”

The TFWA World Exhibition & Conference concluded on Friday 6 October.