LEADER/NEWS Leader
All eyes on the next moves of global superpowers
Global economic uncertainty continues to cause concern among duty free and travel retail operators, especially in the Americas for which there appears to be little respite from the volatile conditions experienced in 2018. As well reported, Argentina, Venezuela,
Ecuador, Uruguay and to a lesser extent Brazil and Mexico faced various political and socio-
economic challenges connected with elections, civil unrest, punitive sanctions, inflation and currency devaluation. Even the US economy, which many would have regarded as
reasonably buoyant in 2018, also began to decelerate in the final quarter of last year. However, perhaps if this translates into a weakening of the US dollar, this might not be a bad result for duty free and travel retailers operating in the region. As suggested by DFA President Leon Falic (interview appears on p31),
the strong US dollar is ‘always difficult’ for its business and he only hopes that nations such as Mexico, Canada, Colombia and Brazil can recover in the coming months to boost spending at the company’s border and airport stores.
Better in Brazil? As an engine of growth and an economic linchpin for many operating in the Americas, operators are watching Brazil in particular to see if the Bolsonaro administration can bring about much-needed stability. There did seem to be a slight uptick in economic growth towards the end of 2018, and retail sales (according to various operators interviewed inside this issue) also appeared to move in the right direction. More positively an ‘accommodative monetary policy and falling
unemployment are seen kicking the recovery into a higher gear in 2019’, according to an outlook provided by FocusEconomics. That said, the country is now facing another unexpected setback following the collapse of an inactive dam, owned by large mining company, Vale. However, should the impact of this be expectedly short-lived, the economy and consumer confidence should continue to recover in 2019. From a global perspective, most are now focused on the outcome of
an ongoing trade war between the US and China. As reported in the January issue of TRBusiness, this emerged as one of the top concerns for duty free and travel retail companies responding to the Global Industry Survey. The fears of many were perhaps abated by conciliatory talks between
the US President and Chinese Vice Premier Liu He in Washington in March. Even if at the same time the White House re-issued a statement that a scheduled tariff increase on $200bn of Chinese goods to 25% from 10% would go ahead if no deal was reached by 1 March. However, despite all of this global economic uncertainty, passenger
traffic growth remains high, which means that when consumer confidence does eventually return in the Americas, travellers’ propensity to spend in the airports, at the borders and at sea should also increase. Enjoy the issue.
Charlotte Turner, Managing Editor MARCH 2019
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Conrad Hotel, Singapore 13 May 2019
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support SOS Children’s Villages The forthcoming Travel Retail Awards will act as a platform to voice the vital work of global charity SOS Children’s Villages, as TRBusiness teams up with leading global DF&TR operator Dufry Group in a special initiative. SOS Children’s Villages works to protect children who have
lost parental care, or who are at risk of losing it. It works with communities, partners and governments to ensure the rights of all children, in every society, are fulfilled. A donation from every table/seat booked goes towards SOS
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£195 per seat (£1,950 per table of ten), which will expire on 29 March. Thereafter, prices will increase to £250 and £2,500, respectively. The Travel Retail Awards takes place on Monday 13 May at the
Conrad Hotel in Singapore during the TFWA Asia Pacific Exhibition & Conference.
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