"New Airport Bans May Hurt Some Shops"

Thursday, August 10, 2006

New Airport Bans May Hurt Some Shops 
By J.W. ELPHINSTONE
The Associated Press 


NEW YORK - The ban on liquids and gels from carryon luggage after a foiled
terrorist plot may pinch airport retailers that mostly sell drinks and
beauty aids, experts said on Thursday.

Worldwide sales of duty free shops totaled $27 billion in 2005, according to
industry-tracker Group Generation, with alcohol, cosmetics and perfume
representing 50.5 percent of total sales. A prolonged ban could take a
significant chunk out of sales, and threaten those shops specializing in
wine and spirits or cosmetics.

"The uncertainty of it and the uneven enforcement of the ban could cause a
30 to 40 percent decline in sales at some stores," said C. Britt Beemer,
chairman of America's Research Group, based in Charleston, S.C.

It could be more for Duty Free shops because alcohol and perfume are the two
largest selling products in many stores.

"I'm not sure if you can completely mitigate the loss of the sales. This
could become a serious problem over the long-term," said Michael Payne,
executive director at the International Association of Airport Duty Free
Stores.

On Thursday, United States banned all liquids and gels from carryon luggage
following the discovery of terrorist plot in Britain. The plot hinged on
terrorists smuggling onboard explosive liquids and detonators hidden in soda
cans.

Britain extended its ban to include all carryon luggage.

"Right now, we're waiting for more clarification as the TSA evolves its
requirements," Payne said. "But we'll do whatever needs to be done to make
sure it's safe to fly."

Other retailers may find the ban boosts their bottom lines, according to
Scott Krugman at the National Retail Federation.

"Restaurants will end up benefiting from this because people will eat and
drink before getting on their flights," Krugman said. However, Krugman
expects only a short-term impact on retailers.

"Once we know which regulations are permanent and which ones are temporary,
we'll see these stores adapt what they're selling and how they're selling,"
he said.

The ban follows several years of flourishing retail sales at the nation's
airports. Increased security checks since Sept. 11, 2001 boosted business at
airport stores as travelers were forced to get to the airport earlier and
shopped during their extra time.

Airlines' recent moves to eliminate or reduce drink and food services to cut
costs also helped sales of water and food items at airports. Travelers
resorted to buying bottles of water and other beverages before boarding the
plane.

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