CEE urged to rediscover ‘passion’ as data shows fall in shopper conversion

By Luke Barras-hill |

The CEETRA Travel Retail Forum was held on 29 June.

Central Eastern European Travel Retail Association (CEETRA) Chairman Andrzej Milaszewicz has issued a rallying call to the regional industry in the face of what are mounting global macroeconomic and geopolitical challenges.

Addressing attendees to the CEETRA Forum, held on 29 June, the Managing Director of Lagardère Duty Free (Polska) said travel retail ‘should recall the passion that we used to have’.

He said while it is “reassuring to see that people in the region still have an incredible hunger for travelling, business didn’t come back as expected and there are many question marks still ahead of us”.

The event was attended by representatives of airports, travel retail operators, brands and related service providers to exchange ideas and best practice as the industry battles back following a devastating two years due to the pandemic.

“Even with some recovery after the darkest times of the Covid-19 pandemic, retail at airports and transportation hubs in CEE are now hit hard by the effects of the war in the Ukraine, inflationary pressures, airport capacity restrictions and staffing issues,” commented Milaszewicz.

Solidarity with Ukraine

Vyacheslav Cheglatonyev, Chief Commercial Officer at Ukraine’s Odesa International Airport, reminded attendees of the airport’s achievements, with a new terminal opened in February 2020 followed by an apron extension and new runway.

Dufry has operated a 600sq m retail space at the airport since February 2021 and also runs a successful duty paid operation in domestic departures.

However, the Russia-Ukraine war has meant Ukraine’s airports have been targeted by Russian missiles and bombs and it is unclear when and under which circumstances Odesa can reopen.

The airport manager called on attendees to stand by Ukraine and offer any support possible.

During the Forum, m1nd-set Head of Business Development Anna Marchesini revealed survey data related to the region.

While airport shop footfall in the first quarter of this year remained flat, conversion decreased on a year-on-year basis.

“Give the visitors a reason to shop once they are in the store”, declared Marchesini, who added that shoppers now buy only 1.5 categories on average, compared with 1.8 a year ago.

Meanwhile, ‘gifting’ has decreased (28% of purchases) while ‘sharing with others’ has steeply increased to 23% of all purchases.

Marchesini noted: “instead of value for money, convenience is now the number one driver to purchase, compared to pre-covid levels.”

Duty free on arrival campaign update

Julie Lassaigne, Secretary General, ETRC.

Meanwhile, Paweł Galiak, Chief Commercial Officer at Kraków Airport, pointed to the importance of partnership.

During the crisis, the airport abolished minimum guaranteed rents and linked retail concession fees to passenger numbers.

This ensured the market’s confidence – just ahead of an RFP for commercial space was launched in December 2021.

Krakow is located in close proximity to Ukraine’s border.

Around 4.3 million crossings have been made from Ukraine to Poland since the beginning of the conflict.

He believes the industry has proven its resilience to external shocks and can cooperate and collaborate though obstacles to an extent not witnessed before.

Obstacles to a fast recovery include staffing issues, inflationary pressures and the threat of new variants of Covid.

CEETRA Forum attendees also heard from Julie Lassaigne, Secretary General, ETRC, who offered an update on the duty free on arrival campaign.

She expressed her pleasure at the launch of a formal study on VAT rules applicable to the travel and tourism sectors, which will also assess opportunities to allow duty and tax free shops on arrival in the EU.

This study is part of the EU VAT Tourism package, which will be published by the European Commission next year, to support the recovery of the sector after the pandemic.

ETRC has now launched a new campaign aimed at ensuring the industry contributes to the study, builds momentum for a legislative process to be launched, and engages with members states once the decision process starts.

Work is ongoing to publish a comparative study showing how duty and tax free for arriving passengers is a ‘successful model in several European countries, namely Norway, Turkey and Switzerland’, she added.

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