Introduction: While other UK businesses worry about what happens after Britain leaves the European Union (EU) in the wake of Brexit, the country’s travel retail industry is staring at a huge opportunity, says Brian Collie, Chairman of Flio*, former BAA Group Retail Director and one of the channel’s most respected voices.
In a special column for The Moodie Davitt Report, he says the industry must begin its preparations now for a potentially game-changing development.
While the critical question of whether the UK leaves the single market or not** (if it doesn’t then the return of duty free to EU-bound travellers is not a fait accompli -Ed) looks like being unresolved for some time, Collie believes the opportunity ahead is tremendous. You can comment on this article via the Disqus platform at the foot of the story.
As the rest of UK businesses worry about what happens after Britain leaves the EU, the travel retail industry is facing its biggest opportunity in a generation.
For travellers leaving the UK post-Brexit, it potentially means at least half-price spirits, wines and cigarettes and a genuine -20% off all other products for sale in airports, border stores and inflight and onboard.
For airports, retailers and suppliers it means a market of 27 EU countries (with a population of over 300 million) becomes truly ‘International’ – so all outbound Brits and homeward-bound foreign nationals could [subject to departure from the single market -Ed] be exposed to a potentially phenomenal increase in sales and margins.
As Group Retail Director of all 20 BAA plc airports (including Heathrow, Gatwick, Stansted, Southampton and Scottish airports in the UK) and Chairman of World Duty Free (at that time the biggest duty free company in the world with airport, border, inflight and onboard stores) between 1997 and 2005, I lived through the opposite side of the equation. The Maastricht Treaty brought about the abolition of intra-EU duty and tax free sales as we introduced the ‘four freedoms’ with a borderless internal market in mid-1999.
We all worked together across the industry to try to minimise the effects of such an enormous change to our market – in the UK at BAA/World Duty Free we developed closer relationships between the airports, the retailers and the suppliers and looked to put the traveller at the heart of our offers in our expanded retail malls, our marketing and our pricing policies.
This was the genesis of the Trinity working together and led to the launch, with Martin Moodie, of the first-ever Trinity Forum in London in 2003.
Brexit is a uniquely UK opportunity – in my opinion Britain becomes an off-shore duty free island for all international travellers as soon as it leaves the EU. However, all companies who supply, own or manage travel retailers, airports and manufacturers involved in the UK travel retail industry will see sales, profits and company valuations soar post-Brexit – so we must be ready for the Bonanza approaching.
Let’s use our time wisely and co-operatively – we faced the downturn together as a Trinity, let’s also face the upturn as a team!
*Flio is a global airport app that offers one-click Wi-Fi access, comprehensive airport information and exclusive retail offers].
**Footnote: According to Duty Free World Council lobbyists the return of duty free in the UK to EU-bound passengers is heavily dependent on whether the country, post Brexit, remains part of the single market.
They contend that because the single market removed the principle of import and export, as well as trade borders and tariffs, between EU states, then duty free would remain an anomaly if Britain stays in that single market.
