The Global Duty-Free Market: Opportunities and Threats to 2010
Euromonitor International's The Global Duty-Free Market: Opportunities and Threats to 2010 The global duty free industry was adversely affected by the changing legislation imposed by the single European market. But airport shopping remains big business. Euromonitor International's The Global Duty Free Market report assesses the size and structure of the global duty free business and analyses the key regulatory, consumer and sectoral trends that will underpin its future expansion.
Chapters: 8 | Tables: 69 | Publication date: Aug 2005
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Regional coverage
Western Europe; Eastern Europe; North America; Latin America; Asia-Pacific; Oceania; Africa and the Middle East
Table of contents
1. EXECUTIVE SUMMARY
Meeting demand for duty-free
Market size
Chart 1 Global Duty-Free Market Value, 2000-2005
Share held by tobacco continues to fall
Table 1 Duty-Free Market Value by Major Country: % value Growth, 2000-01-2004-05
Chart 2 Global Duty-Free Market Value by Sector, 2000-2005
Market size by sector and region
Chart 3 Global Duty-Free Market Value by Region and Sector, 2004
Chart 4 Global Duty-Free Market Value by Region and Sector, 2004
Chart 5 Total Global Duty-Free Market Value by Region 2004
Chart 6 Total Global Duty-Free Market Value by Sector 2004
Travel trends
Trends in duty-free retailing
Factors shaping the market
Summary 1 Factors Shaping Duty-Free Market
Consumer trends
Social change
Technological change
Travel value and the low-cost traveller
The airport as ‘centre commerciale’
Increasing capital expenditure on airports
Chart 7 Global Airport Capital Expenditure by Region 2003/2004
IATA against privatisation of Hong Kong airport if charges increase
Earlier check-in may mean longer shopping time
The cruise market
Chart 8 Global Trends in Cruise Passengers 1999-2004
Increased links between brands and duty-free
Refining retailing
Redefining luxury goods
New audiences
Business partnerships
Outlook
Summary 2 Key Forecast Trends
Summary 3 Outlook for Duty-Free Market 2005-2010
Chart 9 Forecast Global Duty-Free Market Value by Sector: value 2005/2010
2. THE REGULATORY FRAMEWORK
2.1 THE GLOBAL DUTY-FREE INDUSTRY
Background all at sea
Jet travel speeds up growth
A concessionary industry
Duty-free Europe and the single market
Tax harmonisation
2.2 TOBACCO CONTROLS AND IMPACT ON FULL RETAIL OFFERING
Table 2 Tobacco as a Proportion of Global Duty-Free Market Value by Region, 2004
Restrictions on tobacco sales
Threat to duty-free tobacco sales
The Canadian experience
Impact of tobacco restrictions on other product sales
Implementing the Framework Convention on Tobacco Control
Government need for revenue means tobacco taxes remain addictive
2.3 AIRLINE TAXATION
Table 3 UK Air Passenger Duty, 2000 Rate
Air Passenger Duty goes direct to HM Treasury
Kyoto Agreement and emissions trading
Impact on spending
3. MARKET DRIVERS
3.1 TRENDS IN WORLD TOURISM
Global overview
Summary 4 Positive Trends in the Travel Industry 2004
Chart 10 Global Tourist Arrivals and Receipts, 1999-2004
Arrivals by region
Only Eastern Europe sees growth throughout 2003-2004
North America affected by 9/11 and SARS
Distance and cost affect Australasian arrivals
Table 4 International Tourist Arrivals by Region, 1999-2004
Chart 11 International Tourist Arrivals by Region: % Analysis 1999
Chart 12 International Tourist Arrivals by Region: % Analysis 2004
The rise of Asia-Pacific
Summary 5 Factors driving the growth of Asia-Pacific airlines
Chart 13 Growth in Passenger Flows by Revenue per Passenger Kilometre 2004-2008
3.2 THE IMPACT OF LOW-COST AIRLINES
Growth in Europe’s low-cost airlines
Summary 6 Opportunities and Challenges in the Low-cost Airline Industry
Number of European budget airlines increases
Chart 14 Low-cost Airlines’ Share of European and Domestic Flights, 2004
Low-cost carriers in North America
No-frills segment burgeoning in Asia-Pacific and Australasia
Summary 7 New Airline Creations 2001-2004
The importance of low-cost airports
Chart 15 Charleroi Flight Movements, 2000-2004
Building travel retail in a low-cost environment
Large hubs still dominate transatlantic travel
Summary 8 Major Hub-based Operators, Transatlantic Passenger Numbers 2004
Regional airports growing but hubs still dominate
Summary 9 Intra-European Travel: Leading Airlines by Seats per Flight, 2004
3.3 TRENDS IN SHIPPING AND CRUISING
National trends in cruises
9/11 has less dramatic effect on US cruise industry
Re-routed cruises underpin growth in safer areas
Pacific Sky operates from New Zealand, reducing dependency on international liners
Sochi development boosts Russian growth
Table 5 Cruise Market Value by Major Country 1999-2004
Leading cruise lines
Weather conditions have adverse effect
Table 6 Leading Cruise Companies by Number of Berths 2003
3.4 TRENDS IN FERRY TRANSPORT
Ferry transport less affected by 9/11, but impacted by development of alternative methods
France, UK and Ireland see below average growth
Table 7 Ferry Market Value by Major Country 1999-2004
4. KEY TRENDS AND DEVELOPMENTS
Summary 10 Key Issues
Social change
Table 8 Population and Growth by Region 1999-2004
Chart 16 Favourite Holiday Activities of Baby Boomers
Technological change
Summary 11 Boeing 787 features
Summary 12 Airbus A380-800 features
Low fare travel and duty-free footfall
The rise of travel value
Luxury brand owners seek greater distribution control
Earlier check-in means longer to shop, but benefits uncertain
Increased security impedes potential
Retail strategies tailored to customer types
Summary 13 Duty free Operator Strategies
Airports dominate duty-free sales
Chart 17 Duty-Free Outlets by Location and Region: % Analysis 2003
Roads used greatly used in Europe
Notable airport expansion
Corporate strategy and consolidation
Ability of travel industry to recover bodes well
Key growth opportunities
Summary 14 Key Growth Opportunities in the Cruise Market
Security issues offer potential for growth
Budget travellers also offer potential
Positive results of litigation
5. STRUCTURE OF THE GLOBAL DUTY-FREE INDUSTRY
5.1 NUMBER OF DUTY-FREE OUTLETS
Chart 18 Number of Duty-Free Outlets by Major Country 2000 and 2004
5.2 GLOBAL SALES THROUGH DUTY-FREE BY SECTOR
Reduced tourism activity adversely affects duty-free sales
Table 9 Global Duty-Free Market Value by Sector, 2000-2005
Table 10 Growth Rates in Duty-Free Market Value by Major Country, 2000-01-2004-05
5.3 GLOBAL SALES BY REGION
Western Europe leads by considerable margin
Chart 19 Share of International Tourism Arrivals by Region, 2004
A wide variety of environments for duty-free
Table 11 Regional Share of Global Duty-Free Market Value by Sector, 2004
Chart 20 Global Duty-Free Market Value by Region, Excuding Luxury Goods 2004
Chart 21 Global Duty-Free Market Value by Region, Including Luxury Goods 2004
Strength of tourism reflected in duty-free share
5.4 GLOBAL SALES BY MAJOR MARKET SECTORS AND REGION
Chart 22 Global Duty-Free Market Value by Region and Sector: % Analysis 2004
5.5 GLOBAL DUTY-FREE SALES BY LOCATION
Chart 23 Global Duty-Free Share by Location, 2003
5.6 MAJOR DUTY-FREE MARKET SECTORS: ALCOHOLIC DRINKS
Table 12 Global Duty-Free Market Value of Alcoholic Drinks by Region and Sector, 2004
Alcoholic drinks face competition from alternative products
Table 13 Duty Free Wine and Spirits as Percentage all Retail Sales 2004
Table 14 Growth in Global Duty-Free Market Value of Alcoholic Drinks, 2000-01-2004-05
Health concerns erode sales of spirits
Growing demand for wine
Table 15 Growth in Global Duty-Free Market Value of Wine, 2004/00
Chart 24 Global Duty-Free Market Value of Wine, 2004
Table 16 Growth in Duty-Free Market Value Wine by Major Country, 2000-01--2004-5
Wine versus spirits
Chart 25 Duty-Free Wine vs Spirits Market Value by Major Country 2004
Growth in spirits markets by region
Table 17 Growth in Global Duty-Free Market Value of Spirits by Region, 2004/00
Table 18 Growth of Duty-Free Market Value of Spirits by Major Country, 2000/01-2004-05
Drinks groups focus on premium brands and emerging markets
Table 19 Pernod Ricard: Organic Growth* in Sales Revenue, 2004
Duty-free, product launches and the back bar
Other sales of duty-free alcoholic drinks
Consolidation, distributors and duty-free
5.7 MAJOR DUTY-FREE MARKET SECTORS: CONFECTIONERY
Duty-free confectionery important in US
Table 20 Global Duty-Free Market Value of Confectionery by Region, 2000-2005
Table 21 Growth in Duty-Free Confectionery Market Value by Major Country, 2000-01-2004-05
Chart 26 Duty-Free Sales of Confectionery by Retail Value, 2004
5.8 MAJOR DUTY-FREE MARKET SECTORS: COSMETICS AND TOILETRIES
Duty-free important for introduction of new product developments
Duty-free cosmetics and toiletries inverse of retail sales
Table 22 Global Retail Market for All Cosmetics and Toiletries by Sector 2004
Table 23 Duty-Free Cosmetics and Toiletries as Percentage all Retail Sales 2004
Chart 27 Global Duty-Free Market Value of Fragrances and Cosmetics by Region, 2004
Cosmetics a driving force for duty-free
Table 24 Global Duty-Free Value Market of Fragrances and Cosmetics by Region, 2000-2005
Duty-free fragrance sales recover from 2003
Table 25 Global Duty-Free Value Market of Fragrances by Region, 2000-2005
Higher skin care growth in Western Europe, Japan holds higher value share in skin care
Table 26 Global Duty-Free Market Value of Skin Care by Region, 2000-2005
Passengers less concerned with price
Table 27 Global Duty-Free Market Value of Premium Cosmetics by Region, 2000-2005
Discounts and promotions increasingly important in mature markets
5.9 MAJOR DUTY-FREE MARKET SECTORS: TOBACCO
Tax regime puts tobacco on defensive
Tobacco sales by region
Table 28 Global Duty-Free Sales of Cigarettes by Value, 2004
Chart 28 Global Duty-Free Sales of Cigarettes by Volume, 2004
Impact of tobacco control campaigns
Compromise in duty-free tobacco environment
5.10 MAJOR DUTY-FREE OPERATORS
Summary 15 Ranking of Duty-Free Operators in Major Global Markets, 2004
The Nuance Group
Summary 16 The Nuance Group: Operational Indicators 2003
BAA
LVMH
6. DUTY-FREE IN MAJOR MARKETS
6.1 EUROPE
Modes of travel
Tourist movements by country
New destinations increasingly popular
Table 29 Europe: International Tourist Arrivals by Major Countries 1999-2004
Table 30 Europe: Growth of International Tourist Departures by Major Countries, 2000-2004
Developments in travel retailing
Summary 17 Developments in European Travel Retailing
Hubs as shopping centres
Key operators: Europe
Table 31 Europe: Major Operators of Duty-Free Outlets by Major Country and Market Share, 2004
Key operators: Scandlines Danmark A/S
Key operators: Chédeville
Key operators: Gebrüder Heinemann
Key operators: Kappe Schiphol BV
Key operators: Aldeasa
Key operators: The Nuance Group
6.2 JAPAN
Market performance
Table 32 Japan: Growth of International Tourist Departures, 2000-2004
Airports
Airlines
Professional baseball players stimulate fan movement
War in Iraq negatively impacts international travel
Ferries
Emerging duty-free formats
Competitive environment
Key duty-free operators
Chart 29 Japan: Duty-Free Outlets by Leading Operator, 2004
Forecasts
6.3 USA
Market performance
Confectionery products gain on the strength of luxury demand
Cross-border travellers keep the market for wine afloat
Table 33 US: Duty-Free Food and Drink Sales: Value, 1999-2004
Table 34 US: Duty-Free Food and Drink Sales: % Value Growth, 1999-2004
Key issues
Table 35 US: Growth of International Tourist Departures 2000-2004
Table 36 US: Departures by Mode of Transport 1999-2003
Table 37 US: Departures by Mode of Transport: % Breakdown 1999-2003
Airports
Ferries
Legislation
Competitive environment
Chart 30 US: Number of Duty-Free Outlets 1999-2004
Table 38 US: Duty-Free Outlets by Leading Operator 2004
Key operators: Alpha Airports Group Plc
Key operators: Baja Duty-free/Fairn & Swanson
Key operators: Fairn & Swanson
Key operators: Duty-free Americas
Key operators: Nuance Group
Forecasts
Table 39 US: Forecast Duty-Free Food and Drink Sales by Value 2004-2009
Table 40 US: Forecast Duty-Free Food and Drink Sales % Growth, 2004-2009
7. FUTURE OUTLOOK
7.1 TRENDS TO WATCH
The product mix
The customer base
Forecast arrivals by region
Oil prices
7.2 FORECAST OVERVIEW
The global duty-free market
UK remains important
Americas less reliant on traditional duty-free products
Chart 31 Forecast Global Duty-Free Market Value by Sector, 2005-2010
Retail inherent to new airports
Consolidation expected in less mature markets
Advent International acquires Dufry, Miami Cruiseline Services sold to LVMH
Table 41 Forecast Global Duty-Free Market Value in Major Countries, 2005-2010
7.3 ALCOHOL
Table 42 Forecast Duty-Free Alcohol Market Value Growth in Major Countries, 2005-2010
Table 43 Forecast Global Duty-Free Alcoholic Drinks Market Value in Major Countries, 2005-2010
Chart 32 Forecast Global Duty-Free Alcohol Market Value, 2005-2010
7.4 CONFECTIONERY
Table 44 Forecast Growth in Duty-Free Confectionery Market Value by Major Country, 2005-06-2009-10
Table 45 Forecast Duty-Free Confectionery Market by Region, 2005-2010
Chart 33 Forecast Global Duty-Free Confectionery Market Value, 2005-2010
7.5 COSMETICS AND TOILETRIES
Table 46 Forecast Global Duty-Free Cosmetics and Toiletries Market Value Growth, 2010/05
Chart 34 Forecast Global Duty-Free Cosmetics and Toiletries Market Value by Sector, 2005-2010
Increased propensity towards indulgence and gift-giving to boost fragrances
Table 47 Forecast Duty-Free Fragrance Market Value Growth, 2010/05
Slow fragrances growth in mature regional markets
Table 48 Forecast Global Duty-Free Fragrances Market Value by Region, 2005-2010
Innovations to boost skin care performance
Table 49 Forecast Duty-Free Skin Care Market Value Growth, 2010/05
Skin care increasingly important in Western markets
Table 50 Forecast Duty-Free Skin Care Market Value by Region, 2005-2010
7.6 TOBACCO
Table 51 Forecast Global Duty-Free Tobacco Market, Growth in Major Countries 2010/05
Chart 35 Forecast Global Duty-Free Tobacco Market Value in Major Countries, 2005/2010
8. DEFINITIONS AND COVERAGE
Scope of the report
Table 52 US Dollar Exchange Rates 2004
Data and research
Product coverage
Distribution channel coverage
Disclaimer