Another plague on travel retail’s house

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Martin Moodie
Martin Moodie is the Founder & Chairman of The Moodie Report.

Right now I can’t read too good
Don’t send me no more letters no
Not unless you mail them
From Desolation Row
– Bob Dylan, Desolation Row

It’s not quite the ‘Seven Plagues’ of the Book of Revelation but it does seem as if there is some greater force conspiring against the well-being of the travel retail channel.

In the past few years the sector has been buffeted time and again by the impact of external events and crises – including two Gulf Wars, intra-EU duty free abolition, 9/11, SARS, countless acts of terrorism, currency and economic slumps, oil shocks and natural disasters. Nothing has challenged the business more fundamentally than the current global economic crisis, which is ravaging sales and businesses in many locations and shows no signs of bottoming out.

So it was with weary heart this week that we began to tell the story – as we must – of the mounting health (and tourism) threat from the swine influenza outbreak in Mexico. I am sure that every reader’s reaction ran along the same lines as ours when we first heard the news – broadly interpreted as “Oh not… not again – someone up there doesn’t like us”.

Ultimately it is simply bad luck (and even worse timing) rather than any divine intervention. For retailers such as Dufry and Aldeasa, operating in the virus’s epicentre of Mexico, the blow is especially cruel. Both companies have been managing their respective operations prudently and generally weathering the storm better than may have been expected. For a potential pandemic to appear out of left field and bring tourism to a standstill in Mexico is a bitter pill.

Let’s hope it is a short-lived one – and confined geographically. Many of us remember all too well the dark days of the SARS crisis in 2003, when staff almost outnumbered passengers at some leading Asian airports. Airports such as Cancun and Mexico City are going to be pretty quiet places too in the days ahead. Let’s pray that the sound of silence – in the airports and in the stores – is temporary and that they don’t turn into a latter day Desolation Row.

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