The UK dropped out of the top three duty free and travel retail markets in 2013 as challengers, China and the US, muscled in to overtake it.

 

According to DF&TR analyst Generation Research, the UK plunged from its number two position in 2012 – behind powerhouse South Korea at number one – to fourth last year.

 

President of Generation Research, Yngve Bia (below), comments: “Following a growth in duty free sales of +23.5%, China bypassed the UK to reach second rank. Sales in China, in all channels, were slightly more than $4.2bn. Domestic duty free sales in Hainan soared by about +60% in 2013.”

 

As well as the Chinese surge, the US market also grew in double digits at +18.9% to generate $3.5bn pushing the UK, with sales of $3.3bn, down into fourth place, ahead of Hong Kong.

 

POOR GROWTH

The UK was unable to achieve strong momentum in 2013 – not helped by London Heathrow’s inability to expand its connections to fast-growing emerging markets and access their high-spending travellers. The UK, still the top market in Europe, only managed growth [in dollar terms] of +1.3%, far below that of any Top 10 country [Germany in sixth place managed +2.3%].

 

The drop to fourth place marks what some observers would say was an inevitable decline over the past decade. Between 2003 and 2008, the UK was the biggest market in the world for DF&TR sales but was overtaken in 2009 by South Korea at the time of the global financial crisis which hit European markets hard.

 

South Korea retained its crown last year with sales of $6.3bn up by +8.9%. However, if the pace of growth in China continues at the current rate – especially in light of further potential downtown DF projects – it may not be too long before the PRC takes the top spot.

 

It is also noteworthy that in Generation’s Top 25 ranking for 2013, Macau made an entry, for the first time, in 24^th place after a growth spurt of +31.3% to reach sales of $605m. Macau has become DFS Group’s most important operation according to the Swedish analyst. (Above is the DFS Galleria in Macau.)

 

For more information on Generation Research’s services and its annual Top 25 Country Ranking, click here.