Airport retailers whose sales depend on lotion, perfume, bottled drinks and other products now banned aboard commercial aircraft will have to shift their strategies if the newly enacted security restrictions become permanent.
A one-day ban on selling such items on security-cleared concourses at Denver International Airport was to have been lifted Saturday, but passengers still can’t take those items onto planes.
The restriction means DIA retailers will probably contend with softer sales.
“Airport retail – probably the only category in the last five years to see really good growth – is going to see a rapid decline until these products are allowed on airplanes,” said Britt Beemer, chief executive of America’s Research Group, a Charleston, S.C.-based consumer-research firm.
He estimated that retailers specializing in now-banned products could see a 40 percent to 80 percent decline in sales while the carry-on product bans are in place.
Workers at ACI Newsstand on DIA’s Concourse B on Friday pulled all deodorant, lotions, toothpaste, hairspray and lip balm from the shelves Friday. The ban was enacted after law enforcement officials thwarted a plot in the United Kingdom to bring down airliners by smuggling liquid explosives aboard.
“They’re just making it hard for people,” said Yordanos Araya, a concessions supervisor at ACI. “You’re just throwing your money in the trash if you buy something.”
ACI Newsstand workers also removed snow globes because they contain water and Pringles cans because of the lids.
Transportation Security Administration officials, airport, airline and law enforcement personnel are continuing spot checks to ensure that banned items are not taken on board.
David Mosteller, whose company operates nine restaurants at DIA, said bottled-beverage sales would probably dip at least 30 percent as a result of the new restrictions.
“It’s not going to be a pretty picture for a while,” said Marcia Mogelonsky, a senior analyst for Mintel International Group in Chicago. “(Retailers) are going to suffer.”
Some DIA retailers, including Liberty Duty Free and The Body Shop locations in Concourses B and C, closed voluntarily Thursday and remain closed. Another DIA retailer remained open but worried that the changes could force his aromatherapy and bath store out of business.
“About 30 percent of what I sell you can no longer carry on an airplane,” said Richard Osada, owner of Denver Body & Spirit in the terminal. “If sales drop 20 percent, I’m more than likely going to have to shut down.”
The new security restrictions follow several years of steady increases in airport sales that have largely resulted from passengers having extra time to linger in airports because of post-Sept. 11 security procedures.
Sales per passenger at the top 50 North American airports were up 4.3 percent in 2005, according to data from Airport Revenue News. Gross food and beverage sales were up 19.4 percent. Specialty retail was up 7.5 percent, and news and gift sales were up 22.5 percent, according to the publication.
Retail sales at DIA last year totaled $156.6 million, or $7.22 per passenger.
Duty-free stores are expected to bear the brunt of the new restrictions. Worldwide duty-free sales reached $27 billion in 2005, according to Generation Group, a Swedish research firm.
Eighty percent of those sales are from liquor and perfume, both of which can no longer be taken aboard, Mogelonsky said.
“Duty-free is going to be a disaster,” she said.
TSA spokeswoman Carrie Harmon said duty-free sales of liquids can continue if the store has a method of delivering the items to the gate without allowing them to be handled by customers.
Experts said things will be worse the longer the bans last, and things could change drastically if the bans are permanent.
“If this becomes permanent, retail in airports as we know it won’t exist,” Beemer said. “Shops will have to change their merchandise entirely.”
Another expert predicted nimble airport retailers could arrange to ship products to customers.
“I’m sure creative retailers will come up with solutions rather than just close the stores,” said Patrick Gleason, vice president of the Center for Airport Management in Portland, Ore.
Staff writer Kristi Arellano can be reached at 303-820-1902 or karellano@denverpost.com.
Staff writer Beth Potter can be reached at 303-820-1503 or bpotter@denverpost.com.
