Travel retail suffers as downturn halts spending

The impact of the global economic downturn on the duty-free and travel retail alcohol market was laid bare this week as figures revealed a 9.3% drop in wines and spirits sales in 2009 to 22.7 million nine-litre cases.

Spirits were worst hit, witnessing a 10.6% drop, while wine sales fell 6.3%, according to latest data from the IWSR.

There were some bright spots amid the data, with the rum category holding up well and showing 1.3% sales growth to 1.25m cases, driven predominantly by growth in dark rum. The performance of rum saw it overtake Cognac to become the fourth-biggest selling spirit in the duty-free and travel retail sectors.

Super-premium vodka, such as Belvedere and Grey Goose, also did well, recording a rise of 8.3%, but the vodka category overall saw sales fall by 11.7%.

Another category to suffer was Scotch whisky, though it remained the top-selling sector despite a 10.5% drop in sales to 4.9m cases and Johnnie Walker, the top-selling global travel retail brand, witnessing a 7.7% slip.

Indeed, only one of the top 20 travel retail brands saw sales improve in 2009 – LVMH’s Hennessy Cognac, which grew sales by 5.1%.

Every region saw duty-free volumes fall over the course of the year, with the biggest drop of 19% coming in the Americas. The best-performing region was Asia/Pacific, which saw sales slide by just 5.3%

IWSR travel-retail research manager Sandra Newman said: “Our data shows that some markets such as Australia performed strongly last year despite the difficult conditions the global market faced, and suppliers and retailers have confirmed that recovery is already well under way in Asia/Pacific.

“Sales may still take some time to recover in Europe and North America, but as tourism is now increasing again in many countries around the world the signs are that 2010 will be a much better year for the global travel-retail wines and spirits sector.”

Alan Lodge, 21.07.2010