Sales of liquid items fall at duty-free shops

Passengers stop buying in response to bans

War On Terrorism

August 11, 2006|By TYEESHA DIXON | TYEESHA DIXON,SUN REPORTER

Sales of alcohol, perfume and other items at airport duty-free shops fell immediately yesterday as passengers stopped buying those items in response to new government restrictions on liquids, gels and creams in carry-on baggage.

Also, experts predict that airport retail shops will continue to suffer in light of yesterday's terror scare that forced passengers to dump their beverages, toothpaste and shampoo before boarding planes. But they expect food vendors and others to benefit from passengers who will face longer airport waits for flights because of the new security measures and have more time to spend money.

The United States banned all liquids and gels from carry-on luggage after the discovery of a terrorist plot in Britain. The plot hinged on terrorists smuggling onboard explosive liquids and detonators.

Britain extended its ban to include all carry-on luggage.

Duty-free stores in particular saw a significant decrease in sales yesterday, said Michael Payne, executive director of the International Association of Airport Duty Free Stores, an international trade association based in Washington.

"Perfumes and alcohol products do make up a substantial percentage of sales at duty-free stores," said Payne, who noted that many duty-free shops stopped selling the items briefly yesterday morning as workers studied the new restrictions.

Payne said that although many duty-free stores resumed selling alcohol and fragrances in the afternoon, customers were reluctant to buy them because of the ban.

Worldwide sales by duty-free shops totaled $27 billion in 2005, according to industry tracker Generation Group, with alcohol, cosmetics and perfume representing 50.5 percent of total sales. A prolonged ban could take a significant chunk out of sales and threaten those shops specializing in wine and spirits or cosmetics.

Paul H. Rich, a business adviser for the New York-based business consulting group Rothstein Kass, said airport retail shops will likely lose sales for toiletries such as deodorant, mouthwash and hair products. Passengers often buy those items at the last minute and toss them in their bags before boarding flights.

Sales for Duty Free Americas Inc. were significantly affected yesterday, said Chairman Simon Falic, in a telephone interview yesterday from Israel. Duty Free Americas is the parent company of Duty Free Americas C/O B & T Air Express, the duty-free store in Baltimore-Washington International Thurgood Marshall Airport.

Experts predict that not all retailers will suffer. They say that as customers arrive at airports earlier and endure longer wait, vendors might sell more food, drinks and other items.

"I think people will be more inclined to get [to the airport] earlier," said Bob Goldin, executive vice president of Technomic Inc., a food industry consulting and research firm based in Chicago. "There's more time to linger and more time to purchase."

But if people become more reluctant to fly, as they did after the Sept. 11, 2001, attacks, food vendors and others would suffer, Goldin said.

Rich, the business adviser, agreed.

"I think there will be many less people flying," he said. "And that will hurt significantly all the retailers at the airport."

tyeesha.dixon@baltsun.com

The Associated Press contributed to this article.

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