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Europe: regional analysis Road to recovery? Travel retail A more positive economic environment is slowly emerging in the European travel-retail market, but caution still reigns by Tina Milton s some green shoots begin to appear across on-year in 2013, according to European airport Europe notes. A Europe, retailers and suppliers are slightly trade association ACI Europe. While non-EU ACI Europe director general Olivier more upbeat about the region. With many key countries such as Turkey, Russia, Iceland and Jankovec states: “EU airports consistently countries attempting to shrug off the debt crisis Norway reported strong passenger traffc underperformed their non-EU counterparts and international passenger traffc expected to throughout the year, due to the continued rise by mid-single digits for the remainder of impact of the Eurozone crisis and the maturity 2014, forecasts look likely to match or surpass “ of the EU air transport market. However, the growth rates achieved last year. There may be a better the performance gap has narrowed over the In Europe, fragrance and cosmetics sales economic situation across key past few months and it is encouraging to see saw a 4.1% year-on-year increase to $5.7bn countries like Italy and Spain, passenger traffc at many airports across the EU in 2013, according to provisional duty-free bouncing back, especially in Ireland, Portugal, or and travel-retail sales fgures from Generation but with the depreciation of even Spain and Greece.” Research, Sweden. Beauty sales trailed slightly the Russian ruble, a drop in With signs that Europe could sustain a behind the growth levels recorded across all Chinese passenger spend and nascent recovery, he predicts a 3.2% rise in categories in the region—total duty-free and passenger traffc for 2014. The frst quarter travel-retail sales (all categories combined) the US dollar weak against the results signal that this will continue with a came in at $20.14bn, up 4.5% on 2012. euro, the growth will come healthy increase of 4.6%, compared to frst To put it into global perspective, Europe was from European customers quarter 2013. “These are solid air traffc fgures second only to Asia Pacifc, which still led the for Europe, which refects improving economic beauty march with 14% growth in 2013, to conditions, especially in the EU, where reach sales of $6.62bn. Asia’s growth was way ” consumer confdence has reached pre-crisis ahead of that seen in the global fragrances and BPI coo Eric Henry levels and GDP growth is set to gain further cosmetics market, whose sales were up 8.4% momentum,” Jankovec comments. to $17.13bn last year. growth at 9.6%, EU airports saw a modest The weaker performance of passenger traffc Beauty outperformed passenger traffc growth increase of 1%, with traffc showing good signs in March is primarily the result of Easter shifting at Europe’s airports, which was up 2.8% year- of recovery, particularly in the last quarter, ACI from March to April this year, says Jankovec. Europe in fgures Total European duty free and travel retail sales 2013: $20.14bn, +4.5% vs 2012 Perfumes and cosmetics European duty free & travel retail sales 2013: $5.7bn, +4.1% vs 2012 Passenger growth at European airports 2013: +2.8% vs 2012 Passenger growth at non-EU airports 2013: +9.6% vs 2012 Passenger growth at EU airports 2013: +1% vs 2012 s WDFG says new stores at its Spain and Düsseldorf locations have boosted growth Source: Generation Research, ACI Europe September-October 2014 - N°19 - BW Confidential 73