Travel retail needs more space for premium brands

But experts told The Middle East Duty Free Conference, a two-day symposium on the travel retail industry which opened yesterday, that premium brands generally demand bigger spaces as they need well built stores with large facades suited for their high-end products.

"The business can be a trap to itself," said David Freeborn, general manager of Pernod Ricard Gulf, a distributor of fine spirits and wine brands. He said the industry may be able to bring up the purchasing standards of the increasing number of customers to go for premium brands but can't sustain market demand.

Paul Topping, managing director of Alpha Airport Group, Asia, said the subcontinent of India alone has potential passenger arrival sales of Dh1.46 billion ($400 million) by 2010. He added that new airport space in India is set to double in New Delhi and Mumbai.

Tim Rycroft, corporate relations director at Diageo Global Travel and Middle East, told conference participants the importance of embracing ethical standards in travel retailing.

He said that for instance, Diageo, the world's largest premium liquor company, promotes "responsible drinking" habits to its customers by selling quality products with a reminder not to "misuse" them.

He added that travel retailers must examine alcohol consumption trends and develop consumer insights to make sure that their behaviours are in tune with the expectations of both the drinking and non-drinking consumers.

He noted that a growing number of consumers will be buying products over the next 5-10 years based on whether manufacturers and sellers support programmes that encourage responsible drinking.

"Put simply, consumers increasingly care about whether the manufacturers and retailers of goods and services they buy, care about the same things as them and share their values," he told the symposium at Al Murooj Rotana Hotel.

He reminded travel retailers that consumer expectations and preference have changed dramatically. "Financial success is no longer the only index of whether a company is regarded as a leader, or legitimate."

In a statement, the Middle East Duty Free Association (MEDFA), which organised the two-day conference through the Tax Free World Association, said the event has drawn more than 370 travel retail delegates from across the region.

With the theme "Crossroads to the Future", the conference presents and analyses industry issues including security, customer-focused retail and arrival and downtown duty free shopping.