WDF to renew focus on tax-free business

Dermot Davitt

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A new concept under trial at Edinburgh could be rolled out across the business

After three years concentrating on its core categories of beauty, liquor and tobacco, BAA retail subsidiary World Duty Free is to redirect its attention to growing the tax-free portion of its UK airports business in 2005. Gifts, sunglasses, jewellery, accessories and destination products will all become more important parts of the mix, according to BAA managing director global airport retail Mark Riches.

Riches told RavenFox.com: ?One sector we will concentrate on in 2005 is improving the tax-free and gifting side of the business. We've pulled out of a lot of tax-free to develop a strong core base but now we need to take that next step. Our competition is fierce, from the high street, from supermarkets and increasingly from the internet. If we believe that we should be as good as the high street retailers at what we do and that we should be a top-class retailer across the range, then we need to build the tax-free business.?

WDF is now trialling a new tax-free concept for sunglasses, watches and jewellery at Edinburgh airport, which it will roll out elsewhere if successful. Riches said: ?I'm not prepared to test this kind of concept away from the public eye?you only learn when you can see the reaction of the shopper to it. There's no doubt that Sunglass Hut and the big fashion houses already do sunglasses well in our airports but we think the business is big enough for a new concept. We'll fill a niche with mid-priced and fashionable names and we'll have an agile approach to the range.?

Riches said it was unlikely that tax-free items would take existing space from the core categories. ?If we introduce better ranges, buy and sell well, and remain innovative with top-class service, then tax-free can be successful for us again.?
He added that WDF is also considering how to develop its lower-priced volume business for popular items in liquor and other categories.
 
Said Riches: ?We've worked very hard on our liquor offer post-abolition and now we're considering the next stage: should we recreate the idea of a very good duty-free shop, with old-fashioned values and cheaper pricing? Some customers respond well to that, but the high-volume trade gives a very different retail message compared to our other shops. Fragrances and cosmetics need to be shown off in a certain way, and we still offer our brands the best channel and the best shopper demographics you can find anywhere. But going forward we believe there is an opportunity to do more of the lower-priced, volume business well, and we'll look at that in the New Year.?