CANADA: FDFA FDFA strategic plans dictate fresh operational future


Frontier Duty Free Association Board Member Abe Taqtaq tells Luke Barras-Hill that 2017 spelled some big changes for the voice of Canada’s duty free industry and its convention programme, many of which expect to develop further this year.


O


n the face of things, Canadian land border sales turned in a stable


performance in 2017 of approximately CAD$156m ($123m). Unsurprisingly, the Ontario province posted a strong performance with over CAD$90.7m ($71.5m), followed by Atlantic and Quebec at CAD$33.3m ($26.3m), Pacific at CAD$23.3m, ($18.4m) and the Prairie region at CAD$8.9m ($7.0m). “We are pretty flat year-on-year,


I think we did enjoy an increase last year as a result of the exchange rate; it has somewhat flattened out,” comments Abe Taqtaq, Frontier Duty Free Association (FDFA) Board Member. “Regionally the west coast is


experiencing a bit of a decrease and Ontario is seeing an increase.” Taqtaq admits that the industry faced some challenges on the Canadian- US border in 2017. In the main, this concerned general competition and positioning in a marketplace dictated by the relative strength and weakness of the US and Canadian dollar. However, sensitivity was also felt on the border due to immigration proposals put forward by the US government – although this is beginning to level off as travellers’ uncertainty dissipates and confidence restores, says Taqtaq. “We have always positioned our


self as a value proposition for luxury brands and that’s where we are seeing some of the headwinds on the border right now,” explains Taqtaq.


‘E-border’ threat Nonetheless, increased competition – particularly from the online marketplace – and pricing challenges remain pressure points. At the time TRBusiness went


The gala cocktail at last year's FDFA Annual Convention in Montréal, Quebec.


(NAFTA) talks The Retail Council of Canada came out vociferously in recent months against the proposal, pointing to huge job losses and unfair breaks for e-retailers like Amazon and Ebay, who aren’t always subject to the same taxes as domestic market retailers. “It’s definitely something we are


a little concerned about, but it is a double-edged sword as the FDFA has always been a proponent of increasing the allowances available to travellers across the border,” explains Taqtaq. “Our position on that is to allow


ease of travel and goods across the border. Anything that bogs down the border does not help the duty free business. “The big worry is the more


to


press, the US has been applying pressure on Canada to raise its ‘de- minimis’ threshold covering cross- border online shipments from $20 to $800 as part of ongoing North American Free Trade Agreement


MARCH 2018


customers order their products online at a competitive price and not leave the country, it is not good for our business.” Competitive pricing will always pose a challenge, but a more flattering exchange rate allows stores to be more agile where US consumers are concerned. Unlike international travel retail, where there is more lenience in


terms of pricing and competition, US-bound customers are more susceptible to price squeezes. This factor, suggests Taqtaq, is


a likely reason why sales on the borders haven’t been as pronounced as they could have been in the past 12 months. Although he notes how more stores represented in the FDFA’s membership have risen to the challenge of adapting and renovating their offers to ensure they stay competitive. Having said that, the CAD has


shown signs of strengthening in recent months against the Greenback. The US Consumer Prices Index rose by 0.5% in January and the US Federal Reserve is anticipated to make further interest rate hikes. Taqtaq, who also represents


“We have always positioned our self as a value proposition for luxury brands and that’s where we are seeing some of the headwinds on the border right now.”


Abe Taqtaq, Board Member, FDFA


TRBUSINESS 71


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92