On July 1, intra-
We knew this was coming for eight years now, says Kostas Zografakis of Minoan Lines, but we are a bit unprepared because we had assumed the European Union would extend the deadline until after the busy summer period.
Nevertheless, Greece`s ferry lines have been getting ready for the change since the mid 90s by increasing the variety of products available in their on-board retail stores. Most now boast a fine line of apparel products and, as in the case of Minoan, will soon boast a full line of reading material.
We continue to stock our retail stores with a new, rich variety of products, says Mr. Zografakis, and these products will be sold at prices much lower than similar products in the general marketplace. He says his company is in continual contact with manufacturers and distributors in an effort to find the best prices and special discounts on bulk orders. As well, his retail staff of about 40 attend in-house seminars on sales and display techniques as he found that customers window shop and if they see something they like they will purchase if the price is fair. If our efforts pay off, he says, we will not lay off staff but quite possibly hire additional staff.
Dionysis Theodoratos of Strintzis Lines says his company also concentrates on discounted retail sales and a richer variety of products in order to pick up the loss from duty-free tobacco and spirits, which have always been the most popular products. He says the other big seller, perfumes, should remain a big seller as prices have been kept low. We have been selling at low volumes with high margins, and we will now be selling in high volumes at lower margins.
For the moment, there has been no action taken by the major ferry companies to form a common purchasing and distribution center as a way to get bulk discounts from suppliers, although the idea has been tossed around by some. Nor do the ferry lines intend to forsake retail sales, about 8% of total revenue, and simply lease store space to a private concern.
Duty-free at airports have similar plans, but are expected to go one step further. Unlike ferry lines, which have limited space available for retail outlets, airports can recuperate some losses by leasing space to a variety of retail concerns that appreciate the high traffic areas.
According to the London-based Duty-Free Confederation, tax-free trade in the EU countries generates revenue of more than 4.5 billion pounds sterling annually and employs more than 140,000 people. Whether or not these sales can be maintained without tax incentives won`t become clear for several months at least. Then we`ll see if air fares and coastal shipping fares will increase to cover any possible losses.
A study of travelers at 11 major European airports shows that a majority of international passengers visit duty-free shops and are likely to continue to do so. Those interviewed say they go to the stores not simple to save money but also because of the convenience and the desire to buy gifts.
One exception may be liquor sales and tobaccos, which tend to be the most price sensitive at duty-free shops. However, the study showed that more than 50% of the travelers browse in the shops and, of those people, more than 75% buy something. Europe accounted for nearly half of the world`s duty-free business.
…
On July 1, intra-
We knew this was coming for eight years now, says Kostas Zografakis of Minoan Lines, but we are a bit unprepared because we had assumed the European Union would extend the deadline until after the busy summer period.
Nevertheless, Greece`s ferry lines have been getting ready for the change since the mid 90s by increasing the variety of products available in their on-board retail stores. Most now boast a fine line of apparel products and, as in the case of Minoan, will soon boast a full line of reading material.
We continue to stock our retail stores with a new, rich variety of products, says Mr. Zografakis, and these products will be sold at prices much lower than similar products in the general marketplace. He says his company is in continual contact with manufacturers and distributors in an effort to find the best prices and special discounts on bulk orders. As well, his retail staff of about 40 attend in-house seminars on sales and display techniques as he found that customers window shop and if they see something they like they will purchase if the price is fair. If our efforts pay off, he says, we will not lay off staff but quite possibly hire additional staff.
Dionysis Theodoratos of Strintzis Lines says his company also concentrates on discounted retail sales and a richer variety of products in order to pick up the loss from duty-free tobacco and spirits, which have always been the most popular products. He says the other big seller, perfumes, should remain a big seller as prices have been kept low. We have been selling at low volumes with high margins, and we will now be selling in high volumes at lower margins.
For the moment, there has been no action taken by the major ferry companies to form a common purchasing and distribution center as a way to get bulk discounts from suppliers, although the idea has been tossed around by some. Nor do the ferry lines intend to forsake retail sales, about 8% of total revenue, and simply lease store space to a private concern.
Duty-free at airports have similar plans, but are expected to go one step further. Unlike ferry lines, which have limited space available for retail outlets, airports can recuperate some losses by leasing space to a variety of retail concerns that appreciate the high traffic areas.
According to the London-based Duty-Free Confederation, tax-free trade in the EU countries generates revenue of more than 4.5 billion pounds sterling annually and employs more than 140,000 people. Whether or not these sales can be maintained without tax incentives won`t become clear for several months at least. Then we`ll see if air fares and coastal shipping fares will increase to cover any possible losses.
A study of travelers at 11 major European airports shows that a majority of international passengers visit duty-free shops and are likely to continue to do so. Those interviewed say they go to the stores not simple to save money but also because of the convenience and the desire to buy gifts.
One exception may be liquor sales and tobaccos, which tend to be the most price sensitive at duty-free shops. However, the study showed that more than 50% of the travelers browse in the shops and, of those people, more than 75% buy something. Europe accounted for nearly half of the world`s duty-free business.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
