CANADA. Leading land border retailer Blue Water Bridge Duty Free (also known as Sarnia Duty Free) is aiming to capitalise on a major store expansion, completed in 2015, as it targets a healthy sales increase this year and beyond. The store is located on the Ontario side of the border with Michigan in the USA.
Speaking at last week’s Frontier Duty Free Association trade show, Operations Manager Gerry Lee told The Moodie Davitt Report: “We finished a big expansion last year that took our total space to 30,000sq ft. We now have an additional 3,000sq ft on the sales floor and around 8,000sq ft of warehousing.
“We needed that investment. We have gone through two renovations since we opened the facility in 2002 but each time it meant taking space from the warehouse. That would have become unsustainable at some point so we expanded the entire facility in a way that sets us up for the longer term.”
Among the categories to benefit from the expansion were liquor, with increased space for Scotch, vodka, wine and beer. “People are looking for something different today, whether that is exclusive items or craft beers and we have to devote space to those speciality goods,” said Lee.
“Aside from liquor we increased the area for our high-ticket items such as watches, jewellery, clothing and accessories. It was our way of putting the ‘bling’ back into duty free. And the final touch to the store was a new point of sales system, which we added around a month ago. That allows us to generate better data about sales than ever before. Plus we have a more efficient warehousing system. So we’re done now.”
The investment has delivered an uplift of around +6% in sales so far, though this would have been higher were it not for a bridge renovation that depressed traffic during the summer, said Lee. “We’ll see the true impact of our work over the next year,” he added.
Lee noted the growing influence of external factors on land border duty free trading today. “E-commerce is playing a role and we see how online sites are offering free shipping for customers, which will all have an impact.
“But currency and the regional economy are probably the biggest influences. We have seen a drop in the Canadian economy and obviously oil prices, which allied with the weak Canadian Dollar has hit travel numbers from Canada into the US this year.
“But on the US side the strength of the US Dollar attracts Americans across the border. They also tend to spend a little more than Canadians.
“We now want to make the best of the investments we have made, to take advantage of the positives.”
