LEADING AMERICAS OPERATORS: DUFRY
New Generation begins in Argentina as Dufry prepares risk mitigation
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Currency volatility in Brazil, Argentina and the wider region continues to challenge Dufry’s LatAm business, but organic growth remains on the agenda. Luke Barras-Hill reports.
recession offers glimmers of a revival, with a 1.5% rise in the economy forecast for Q1 2019. Speaking in the January Global
Industry Survey, Díaz pointed towards ‘low levels of stabilisation’ in Brazil following its election last year, with the fortunes of neighbouring countries – excluding Argentina – resting on confidence in the government and an appreciating real. “Although the currency has
Above: Dufry main store at El Dorado International Airport in Bogotá.
I
t came as no surprise when Dufry Group CEO Julián Díaz identified currency stability in South America
as high on the travel retailer’s wishlist for 2019 during an interview with TRBusiness in October. Severe exchange rate fluctuations,
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principally in key markets such as Brazil, Argentina and Chile where local currencies have suffered against the US dollar, have formed part of a broader patchwork of market challenges facing Dufry in South America during the past year. At the time of writing, its full-year
“As for Argentina, we believe we will need more time to see growth again. There will be a presidential election in October 2019 and this could also bring more volatility to the country’s macroeconomic situation.”
René Riedi, Divisional CEO – Latin America, Dufry
28 TRBUSINESS
and Argentina contributed to a steeper decline in Q3 organic growth (-11%), which pales in comparison to the +9% achieved in the first quarter.
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Argentina: More time According to a snapshot from FocusEconomics, Latin America’s GDP was estimated to have risen by 1.7% in Q4 year-on-year, although it notes a ‘disappointing’ annual performance with sluggish growth tied to elections and weakened global trade. However, restoring confidence
in Brazil in the wake of President Jair Bolsonaro’s appointment and Argentina’s gradual emergence from
Gustavo Fagundes, General Manager Brazil and Bolivia, Dufry.
MARCH 2019
by -2.8% to CHF1.2bn ($1.2bn) with organic growth slipping by -1.1% – a marked contrast to the 4.2% growth recorded in the first half of the year. The knock-on effect from Brazil
results were yet to be published (14 March), however, its nine- month 2018 performance points to a ‘deterioration’ in most South American locations. Turnover for the period dropped
stabilised in Brazil after the election in October, we are still facing some volatility especially due to the much- awaited approval of the pension reform in the country, which is expected to be voted on by the end of the first half of the year,” René Riedi, Divisional CEO – Latin America, Dufry updates TRBusiness. “As for Argentina, we believe we
will need more time to see growth again. There will be a presidential election in October 2019 and this could also bring more volatility to the country’s macroeconomic situation. “Having said that, Dufry is
prepared to face any difficult environment using its internal tools to mitigate the possible impact. In Brazil, for example, we have refurbished and increased shop sizes and brought new brands to enhance customers’ experiences.” Dufry will be hoping for a more pronounced stabilisation to coax
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