BW Confidential - Issue #1 - April 2010 - (Page 38)

Travel retail Europe Trudging forward European airport beauty sales are set to move at a snail’s pace as a rebound in travel is not on the cards for 2010 by Kevin Rozario hile most European travel retailers could not wait to see the back of 2009, they were not exactly looking forward to 2010. The general economic indicators predict a recovery in name only, with limited growth in most EU countries, creeping unemployment and outbound travel expected to be sluggish in big markets, such as Germany and the UK. Monthly data from the Association of European Airlines (AEA), which represents Europe’s most important network carriers, show that big declines in passenger numbers in the first half of 2009 (see box) fell to low single digits by the year end, but overall 20 million fewer passengers took to the air. This collapse dramatically tops the previous biggest drop: a loss of 14 million in 2002, following the 9/11 terrorist attacks. W Sterling’s decline in value against the dollar and euro since October 2008, when the financial crisis began, has made the UK a bargain hunter’s paradise. While London tourist numbers fell by 8% in the 12 months to November, spending levels stayed constant, while High Street sales rocketed “ UK rides out the storm Growth in 2010 is unlikely to recoup these lost airport consumers, but conditions are variable across the continent. Throughout 2009, despite the UK economy suffering more than its EU neighbors, travel retail did not feel this pain. Autogrill-owned WDF, which operates at big airports including London Heathrow, Gatwick and Stansted, saw strong beauty sales. WDF puts this down to its high profile advertising and marketing of its reduced prices. Countries such as Spain, Greece and Portugal are suffering much more due to high unemployment and the loss of UK customers. I don’t foresee major recovery for these markets in 2010 Beauté Prestige International md travel retail & export Alexandre de Chaudenay by 13.3% and 12% in November and December, (source: Visit London). Heathrow’s passenger numbers slipped by just one or two percentage points to November 2009, a complete contrast to falls of 9.4 to 12.7% seen at airports such as Dublin, Stockholm, Barcelona and Milan Malpensa. ” WDF head of beauty Debbie Ansell tells BW Confidential: “Christmas was particularly successful for us, but beauty sales have been strong throughout 2009 with all core categories: skincare, cosmetics and fragrances, delivering good year-on-year growth. The value proposition, for example our ‘40% off’ campaign, has driven sales.” A focus on new launches also led to the highest sales participation in fragrance ever, while an emphasis at Christmas on coffrets where additional items like body lotions and shower gels were offered for the same price as the fragrance alone, underlined the value statement. But it is not just offers that have caught consumers’ attention. “Premium beauty continues to be in demand, particularly in Heathrow, despite the economic situation,” adds Ansell. “We have every expectation this trend should continue in 2010.” New ideas for prestige In tough times, premium beauty has often been able to ride out negative conditions in travel retail. Germany’s Gebr Heinemann witnessed this with Chanel. In December, the company re-opened its flagship store in Frankfurt terminal 1B in a new format. As part of the fanfare, the firm introduced Chanel’s 12-item Les Exclusifs collection in a 25m2 (270ft2) pop-up concept. 38 April 2010 - N°1 - BW Confidential credit: stock.xchng

Table of Contents for the Digital Edition of BW Confidential - Issue #1 - April 2010

Update - Brand and retail recap
Take note - Market facts, figures and trends
Launches - The latest fragrance, skincare and make-up launches
Best of BW - Market highlights
Interview - Sephora international & development md Olivier Schaeffer
Insight: make-up - Category overview
 - Industry viewpoint
 - Trends
Wellness report - Overview
 - Industry roundtable
 - Spa case studies
Travel retail - Europe: little chance of a rebound
Market watch: Western Europe - Regional analysis
 - Germany
 - France
 - UK
 - Spain
 - Italy
Radar - Six up-and-coming beauty brands
Packaging special -  Industry analysis
 - Innovation
Last word - UBS analyst Nik Modi's outlook for 2010

BW Confidential - Issue #1 - April 2010