ASUTIL 2017
Latin America rebounds +30% as industry faces a ‘new reality’
Latin America has experienced its fare share of economic turbulence of late, with travel retail’s volumes and margins being squeezed. However, at this year’s final standalone ASUTIL conference Luke Barras-Hill hears that duty free is recovering nicely.
A
s well noted in TRBusiness’ Top 10 Operators in the Americas report earlier this
year (see March print issue), the latter half of 2016 offered Latin American travel retail some encouraging green shots of recovery. In a snapshot last month, Focus
Economics noted a Q1 regional economic rebound for the first time in nearly two years, with aggregate GDP increasing 0.7% year-on-year. Looking ahead, it forecasts Latin
America’s GDP to grow to 1.5% this year and rise by 2.5% in 2018. While the figures are encouraging, it will take more than a little time to reach – if ever – the boom periods enjoyed in previous decades. This year’s ASUTIL conference,
entitled ‘Back to the Future’, made one thing clear: while growth is returning to the regional industry, the landscape today is very different from what it was in times of previous prosperity.
Changing landscape Opening the conference, held at the Hilton Barra Rio de Janeiro, 6-9 June, ASUTIL Secretary-General José Luis Donagaray confirmed that travel retail and duty free sales increased by more than 30% in Q1 2017 year-on-year. This corresponded to a rise
in PAX of +23% and an increase in average ticket prices of +5%, with most areas posting double-digit growth. On a category level, edibles
performed the strongest (+45%), followed by electronics (+44%), liquor (+36%), tobacco (+33%), perfumes & cosmetics (+28%) and assorted products (+23%).
JULY 2017
Rio de Janeiro was the location for the last standalone ASUTIL conference. “If we compare the first
quarter this year to first quarter last year, we have an evolution,” he told delegates. “This shows improvement, which
is especially due to the appreciation of the real versus the dollar, which has brought consumers back to the stores and travelling. “All categories have recovered; we
were coming from very low numbers but they are striking. At any rate, we wish these will continue so we will go back to where we were before.” But Gustavo Fagundes, ASUTIL
President and COO, Dufry Brasil & Bolivia, issued a rain check on developments. “The reality we are facing today
is completely different from the one we used to have when we were on track before. “The industry has changed
dramatically and the importance of generating relevance to our customers is key.” Speaking to TRBusiness separately,
Fagundes acknowledged that the South American duty free business is “back on track”, but also said: “On the other hand, the challenges are completely different to the ones we had 20 years ago; we have to transform the industry and we believe we have the tools and energy to do so.” In doing so, he emphasised the
need for travel retail operators and suppliers to collaborate rather than work in silos. “The relevance to the consumer
is going to increase if we all agree that this is a joint effort,” Fagundes explained. “The time to market is quicker,
“All categories have recovered; we were coming from very low numbers but they are striking.”
José Luis Donagaray, Secretary-General, ASUTIL
TRBUSINESS 25
M1nd-set CEO Peter Mohn delivers new insight on price perceptions in duty free.
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