DFA boosted by border business during pandemic

By Andrew Pentol |

Leon Falic, President, Duty Free Americas.

Duty Free Americas (DFA) has revealed that its border business has performed well during the coronavirus (Covid-19) pandemic while its airport operations have understandably suffered.

DFA runs a number of stores on the US/Mexican border and elsewhere across Latin America under the UETA branding.

In conversation with TRBusiness as part of the Leading Americas Operators report which will appear in our April e-zine, Leon Falic, President, Duty Free Americas said: “The borders are doing well and maybe even better than before the pandemic.

“This is because road travel is not a problem. People are in their cars and feel safe. Many people cross the border to work. We call it essential business, so the borders are doing well for us.”

While business on the borders has generally been a bright spark for the company, this is not the case in Brazil where DFA finally opened its first border store around three months ago.

BRAZILIAN BORDER STORE FINALLY OPENS

The store is located in Uruguaiana, the second largest city on the Brazilian border with Argentina and located across the street from the Dufry outlet that opened in July 2019.

Mainstream products from leading beauty brands, for example, have continued to perform well during the pandemic.

Falic said: “We have opened the border store, but Brazil is very tough. The country does not seem to have recovered.

“Brazil is one of the countries which has suffered the most. Business in the border store is quiet compared to what I am used to in my other border outlets.”

In terms of challenges across its overall operations, stock-related issues have been a significant obstacle. He explained: “We were forced to throw away tonnes of confectionery products which had expired.

“Stock management has been challenging in regard to any products with some sort of time limit associated with them. Time limits can relate to expiration or seasonality.”

While people have continued buying popular beauty and liquor items, the newer products have suffered, according to Falic.

“People are unwilling to try new things like they were previously, but the mainstream products are doing very well.”

While Falic stopped short of making concrete, time-specific projections, he nonetheless provided some interesting thoughts on how the recovery might play out.

The Americas travel retailer has been forced to throw away confectionery products which have expired and manage various stock-related issues.

“I think people will want to travel and get back on a plane. There are two issues here: one is travelling and another is shopping. I believe people do want to spend and shop, but right now are concentrating on getting the vaccine.

“There are several questions, such as how confident people will be to travel after they have the vaccines and how effective the vaccines will be.

“We don’t want our business to be based on speculation. We want to base it on what we see. We will continue navigating through this crisis and hopefully doing well.”

Falic also highlighted the need for sensible contracts, which enable all parties to make money in the post-Covid-19 world. “We have all lost a couple of years and need to recoup this. It is not only about securing extensions.

“It is about minimum annual guarantees, for example, which are just unsustainable for now. We will all need to work together to ensure our businesses grow at the same time.”

He added: “Airports definitely receive a good piece of our business, but much of this in the future will depend on what people buy and the items we have in our stores. Things are changing. We just have to ensure everybody understands which I think they do.”

On the issue of change, Falic acknowledged that the world is now about distancing and that everybody has had to follow the same protocols. “Even when you talk to people now there are no handshakes. Retail is not about distancing. It is more about approaching.”

See the upcoming April e-zine for the full interview with Leon Falic, President, Duty Free Americas.

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