By Richa Naidu
LONDON (Reuters) – Imperial Brands said on Tuesday it was starting to see some recovery of sales of cigarettes in duty-free shops at airports and in popular European holiday destinations as COVID-19 restrictions ease and people begin to travel more.
Tobacco, alcohol and luxury goods makers were hit hard early on in the pandemic when travel was limited, depriving them of a key chunk of sales.
In its 2021 annual report, Imperial said travel recovery remained “difficult to predict due to varying COVID-19 restrictions across Europe”. Now, months later, the maker of Winston cigarettes and Backwoods cigars said it was seeing a recovery in the market.
“Our global duty-free business and our travel retail sales in the holiday destinations in Southern Europe have begun to recover as cross-border travel resumes,” the company said, adding that it had seen a similar recovery in the Middle East.
Globally, duty free sales accounted for roughly 2% of annual revenue prior to the pandemic, it said. Earlier on Tuesday it said it was on track to meet its 2022 goals helped by strong sales of ecigarettes and heated tobacco in Europe, driving its shares to a more than two-year high.
Major tobacco industry rival Philip Morris International also said in April that increased travel supported volume growth in Spain and duty free stores around the world.
Other industries are also benefiting from a return to airport shops.
Drinks group Campari said this month that travel retail had increased by 50.2% while beauty products makers L’Oreal and Estee Lauder also saw a strong recovery in some markets.
“At the beginning of the year, we are seeing a very strong recovery, again, plus 18%, with air traffic resuming gradually,” L’Oreal CEO Nicolas Hieronimus said on an annual general meeting call in April.
To be sure, with restrictions remaining in China, Estee Lauder said “a precipitous decline in Chinese travel in March” held back travel retail sales in Asia.
(Reporting by Richa Naidu; Editing by Emelia Sithole-Matarise)
