CYPRUS. The harsh impact of the country’s EU accession on duty free retailing is made clear in Cyprus Airways Duty Free Shops’ annual report for 2004. But the retailer says it has managed to soften the blow through an extensive image and marketing makeover.
Cyprus Airways Duty Free Shops operates 14 shops in the international airports of Larnaka and Paphos.
Over the past eight years the company has followed a profitable path, increasing its sales by +250%. That sharp growth rate continued during the first four months of 2004. Then Cyprus joined the EU, which meant retailers could no longer sell duty free items to intra-EU passengers.
As a result the year closed with a reduction in sales of -15.1% compared with 2003. However, the decline was much less than that experienced by retailers in other new EU states, the company claimed.
That was attributed to a review of its marketing strategy, which from 1 May focused on the Travel Value concept. The retailer proceeded with a “complete facelift”, changing and upgrading its corporate identity. This features new colours, a new logo, new signage and new shopping bags, all designed to create a “refreshing, friendly and competitive” image.
This new identity, which sees the familiar Travel Value logo placed next to the company name and boosted by extensive advertising, helps support the retailer’s proposition.
Other activity includes seasonal competitions featuring expensive prizes, both in departures and arrivals. These began during the 2004 summer period and continued through Christmas.
The retailer has also attempted to get closer to its suppliers, according to General Manager Costakis Koukkoullis. Better liaison and co-operation was initiated with the aim of driving purchasing towards products that would take the place of the former duty free offer.
“The aim in the new order of things however always remains the same,” commented Koukkoullis. “To keep the company moving with absolute ease, focusing on diversification and pressing on with its profitable operation, as a fundamental and specialised organisation within its sector and in the region in general. ”
Footnote:The future shape of duty free and Travel Value retailing at Larnaca and Paphos airports is dependent on the outcome of government negotiations for a build-operate-transfer (BOT) project to construct a new airport at Larnaca, earmarked to open in 2007, and another in Paphos for 2006. The Hermes Airports Group consortium is close to sealing an estimated US$450 million deal to handle the project.
One of the Hermes Airports Group partners is Aer Rianta International, which is likely to assume overall retail responsibilities at the two airports if the agreement is secured.
MORE STORIES ON DUTY FREE IN CYPRUS
Boost for Aer Rianta International-Middle East as Hermes group closes in on Cyprus deal – 19/01/05
Cyprus Airways Duty Free shows its Christmas spirit – 20/12/04
Cyprus Airways Duty Free Shops revamps image for EU era; unveils big Christmas promotion – 28/10/04
