The Asociación Sudamericana de Tiendas Libres (ASUTIL) has suggested the worst of the coronavirus (Covid-19) pandemic has passed in Latin America and is predicting a slow but steady monthly recovery.

Speaking during the Association’s first webinar of the year, José Luis Donagaray, Secretary General, ASUTIL emphasised that the situation in the region “remains complicated” and suggested there is plenty of hard work for governments to do, but remained optimistic.

“Up to 2 June, we were very far from what is happening in North America and the EU in terms of vaccines. We need to improve and hope things will move very quickly.”

Chile is the leader in terms of vaccinations in Latin and South America. As of 2 June, 42% of the population had received two doses and 14% were partially vaccinated. Uruguay, Dominican Republic, Argentina, Brazil and Costa Rica were among the next in line.

“The experts say we need 70% of people to be vaccinated in Latin America to achieve a good herd immunity. Now that we have accessibility to different types of vaccines we expect to achieve this herd immunity in the final quarter of the year.”

RECOVERY EXPECTATION

Donagaray then shared some key findings from Swiss consumer research company m1nd-set’s Business 1ntelligence Service Recovery Monitor — Latin America. As reported, ASUTIL was the first regional association to adopt the monitor and share the insights with its members.

“In 2021, global passenger numbers in Latin America are expected to recover to 52% of pre-Covid levels (2019) and in 2023 global passenger numbers are expected to surpass pre-Covid-19 levels (105%).”

The study also suggests that digital opportunities are becoming more relevant to people not wishing to spend too much time in stores and that clothing and accessories (+10%), tobacco (+8%), skincare (+8%), jewellery and watches (+7%) and toys (+6%) have become more popular in 2021 compared to last year.

In terms of airline frequencies, Argentina (international and domestic combined) is down -81% in 2021 compared to 2019, according to data provided by Dufry. Bolivia (-61%), Brazil (-68%), Chile (-62%) and Peru (-79%) also registered significant decreases.

“Airline frequencies in Uruguay have dropped because the country does not have its own airline. Frequencies in the country have also decreased due to the government restrictions.”

The long duration of the pandemic and the fact passenger numbers in the region are not expected to recover until 2023 means further help from governments is needed.

“We are asking governments to increase purchasing allowances, allow consumers to purchase online up to 15 days after arriving at their final destination and to permit online purchases prior to departure,” Donagaray remarked.

Next to speak was Carlos Loaiza-Keel, General Secretary of the Chamber of Free Shops in Uruguay. Loaiza-Keel, who revealed the Chamber is celebrating its 10^th anniversary this year presented some key market figures and regulatory highlights.

“In the short-term, we have been working on the re-opening of the border duty free shops on the Uruguayan side.

“Due to the P1 Covid variant from Brazil, the Uruguayan government decided to close the stores in March 2021 as they were attracting Brazilians from Rio Grande do Sul.”

He added: “Since then, we have been in constant contact with the Uruguayan government, showing them that duty free shops were not the principle cause of the P1 variant spread in Uruguay and emphasising that the stores met the highest health standards and protocols.”

The Chamber’s efforts ultimately paid off and on 21 May, the Uruguayan government announced that border shops in the country would re-open on 24 May.

In the long-term, the Chamber will work with the Ministry of Economy, the Customs Authority and Tax Authority on two main elements, with the aim of achieving a level playing field between the Uruguayan and Brazilian regimes.

One element is the drafting of a negative product list. Items on this list will not be sold under the Uruguayan regime. Currently, Uruguay has a positive list of products which can be sold, but the list, however, does not include a significant number of items that can be sold under the Brazilian regime.

E-COMMERCE FOCUS

E-commerce is another area the Chamber is focusing on. Loaiza-Keel explained: “We’re figuring out the best way to sell products online to foreign customers and developing a new technological and logistical mechanism in order to sell and transport the goods sold online.”

Offering a retailer’s perspective on the impact of the pandemic was Marcelo Montico, CEO, Neutral by Luryx Duty Free Shop, who revealed stores were closed for 50 days in 2020 and 60 days in 2021 (reopening 24 May).

“Borders have been closed since March 2020 meaning the number of potential customers [to visit our stores] has fallen 90%,” Montico emphasised.

In addition, store capacities have been reduced to one customer for every 5sq m and time spent by customers in stores has dropped to 16 minutes from 37 minutes pre-pandemic.

“The impact of Covid-19 was large, but at least we were able to maintain operations with some customers. In the case of Neutral, sales dropped 38% versus 2019, which was a special year [due to the acquisition by Top Brands International].”

Minimising the drop in sales was the main priority for Neutral, according to Montico. “The main idea was to adopt a more digital platform to reach consumers at home.

“Bringing the platform to consumers and enabling them to purchase online through different forms of technology was the best strategy.

“We have already stated integrating all the platforms (Instagram, Facebook, WatsApp business and our website) through which purchases can be made and items can be collected in stores.”

Adding their own reflections of the pandemic were Enrique Urioste, Dufry, General Manager, Sub Cluster South America and Jose Luis Rego, Operational Director, Dufry Brazil.

“Leaving aside the numbers, every time restrictions were relaxed or there was an opening to travel, people were willing to do so,” Urioste remarked.

“People’s willingness to travel is important. The foundations of the industry are there and we will see that when we come back.”

The re-opening of the Brazilian border with the US will change the business, predicts Rego. “We believe the US border with Brazil could open in July or August. If that happens, the business will jump and the numbers will move fast.”