"Duty-Free Shops Are Now Customer-Free"

Friday, August 11, 2006

Duty-Free Shops Are Now Customer-Free
For concessionaires at LAX and other airports nationwide, the ban on
carrying liquids onto jetliners is a direct hit on their cash registers.
By Juliet Chung and Rong-Gong Lin II
The Los Angeles (CA) Times


Concessionaires and duty-free shops at LAX were hard hit Thursday by a ban
on carrying liquids aboard flights.

With duty-free sales of liquids under a complete prohibition for much of the
day, sales clerks awkwardly warned customers against buying expensive
liquor, perfumes and creams.

"I'm sorry. We cannot sell this today," one saleswoman told a startled
traveler shopping for body lotion at Los Angeles International Airport.

Although regular concessionaires were allowed to sell drinks and other
items, passengers who had been told not to bring beverages onto aircraft
appeared to be avoiding airport stores altogether.

"They're just afraid when it comes to buying anything," said Damien Morris,
an independent contractor for airport shops, as he gazed at a sparsely
visited store. "Today's going to hurt. I hope this ends soon, because it's
hurting everybody."

Shops and airports had much at stake in the middle of a busy travel season.
Concessionaires generate 25%, or $122.1 million, of LAX revenue; more than
40% of that from food, beverage and duty-free sales.

By midafternoon, there was some good news as the Transportation Security
Administration lifted the ban on duty-free sales. All purchases, however,
had to be hand-carried onto flights by duty-free shop employees. Under the
old rules, employees delivered packages to passengers at the gates.

The scene at LAX was mirrored across the country. Simon Falic, chairman of
Duty Free Americas, based in Hollywood, Fla., said he had shut down liquor
and perfume sales early Thursday in about a dozen airports, including those
in New York City, Washington, Chicago and Miami. Liquor and perfume make up
about 75% of duty-free sales, he said.

"Definitely, it makes a big impact on us," Falic said.

At LAX, tourists dissuaded from buying luxury goods were dismayed.

"Oh my goodness!" said Amy Lee, 50, after a clerk told her that she could
not sell any of the $125 and $140 bottles of Cabernet Sauvignon the Shanghai
tourist had been eyeing.

Saleswomen worried privately about making their monthly quotas, and
confusion reigned over how to enforce the new policy.

At one point, duty-free shop employees in the international terminal were
telling passengers they could buy liquor or cosmetics, as long as the items
weighed less than 4 ounces. But by noon, the employees had reversed
themselves, instructing passengers that all sales were off.

"It affects all skin care, a lot of lip [products] - it's not good," said a
glum Emily Shaffer, a cosmetics saleswoman at a DFS duty-free store in the
Tom Bradley International Terminal.

"Thursdays, Fridays and Saturdays are the height of traffic in the stores,"
said Yanay Proenza, a DFS manager, scanning the light foot traffic in the
sales area around 11 a.m. "This is what it should look like at night."

Joseph Lyons, a DFS vice president, said he was uncertain how long it might
take for airport shops to recover from Thursday's chaos.

"We really don't know how this is going to play out," he said. "Liquor,
wine, perfume are important parts of the business. Everyone right now is
trying to get the business back and trying to get things under control
here."

By late Thursday, some merchants had noticed one hopeful sign.

As flight wait times lengthened, passengers started buying beverages.

Jean Wright, 47, picked up a bottle of water as she waited for a flight to
London.

"We've got a three-hour wait between now and when we board," she said. "So
we're going to drink it then."

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