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Runway Duty Free at Moscow Vnukovo Airport, where fragrances & cosmetics are leading the growth drive |
RUSSIA. Rex Trading, which manages the Runway Duty Free business at Moscow Vnukovo Airport, has reported a +48% surge in sales this year to date against a +14% rise in passenger traffic as the company’s business continues to grow at Moscow’s third airport.
Director Eugene Vasiliev told The Moodie Report: “We are seeing €67 in average transaction values [against €56 at the same time last year -Ed]. The key reasons are the buying power and disposable income of the travelling population; our improved ranges, with a high level of customisation in the stores; plus the lessons we have learned and our experience developed over the past four years here at Vnukovo.”
Fragrances & cosmetics continue to drive growth in the business, at around 44% of sales. Liquor also makes a strong contribution, though tobacco is struggling, at between 3-5% of the business.
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“Watches have shown steady growth and we are looking seriously as how to develop this category“ |
Eugene Vasiliev Director Rex Trading |
The retailer has added new, high-end watch ranges as it develops more premium ranges. Vasiliev said: “Watches have shown steady growth and we are looking seriously as how to develop this category. We want a broader range of high-end products too.”
There is scope to grow the jewellery business, he added, though Customs regulations mean its potential is currently restricted. Retailers that import jewellery have to raise a bank guarantee equivalent to the tax and duty payable on each order. Once the products are sold the retailer receives the guarantee refunded.
Vasiliev said: “It means that retailers cannot make new orders until the previous entire order is sold, or else they have to raise one bank guarantee after another, before they’ve sold the goods. It is having a negative effect on the market. Not everyone can afford endless guarantees and it is stifling sales. We have used the Russian Duty Free Association to open a dialogue with Customs to lift these regulations. Once it’s sorted we’ll be able to develop this category. It affects gold and silver too, not just costume jewellery.”
Vasiliev said that Rex Trading, a partnership with Aer Rianta International, would be taking space at the new International Terminal under construction at Vnukovo, and due to open next year.
*Rex Trading will be among the companies featured in The Moodie Report Digital Print Edition for September, which covers the key travel retail markets of Turkey, Russia, India and China.
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