In a shock move, luxury travel retailer and long time incumbent DFS has revealed that it will not be renewing its travel retail concessions for liquor and tobacco at Changi Airport and will close all its stores there in mid-2020.
Hong Kong-based global travel giant DFS has confirmed that it has decided not to participate in the tender process for travel retail concessions for liquor and tobacco at Changi Airport. The incumbent luxury travel retailer – which has held the concession at Changi Airport since 1980 – had declined to renew its concession in the upcoming tender and will close its existing stores across all of Changi Airport’s airside terminals upon its expiry in June 2020 citing various business challenges.
“Our decision not to bid was based on our unique understanding of the business environment as the current operator of this concession at Changi. Specifically, changing regulations concerning the sale of liquor and tobacco, against a global context of geopolitical uncertainty, meant that staying in Changi was not a financially viable option,” shared Ed Brennan, DFS Group Chairman and Chief Executive Officer in an official statement.
In April 2019, the allowable quantity of duty-free alcohol that can be purchased by travellers arriving in Singapore was reduced by Singapore Customs from three litres to two.
“Although this decision is the right one for our business, it was not taken lightly,” he added. Over 500 jobs will be affected by the pullout.
The ongoing tender process sees three potential candidates in South Korea’s The Shilla Duty Free and Lotte Duty Free, as well as Germany’s Gebr Heinemaan, submit their proposals to be the new concessionaire for liquor and tobacco at Changi Airport. Travel retail operators Dufry, Lagardère Travel Retail and China Duty Free Group, which expressed initial interest when Changi Airport Group announced the opening of the tender May this year, did not participate in the tender.
“Changi Airport Group is seeking a strong partner with retail concepts to augment the passenger experience for the liquor and tobacco concession. From store design and product range, to in-store activations and e-commerce strategy, we look forward to robust and compelling proposals, leveraging new technologies and innovations, to elevate travel retail at Changi,” stated a Changi Airport Group spokesperson in a reply to Spirited Singapore.
“The concession will serve more than 66 million international travellers who pass through Changi Airport annually, and it presents a unique opportunity to work with Changi Airport,” she added.
“We sincerely thank the Changi Airport Group for their past support, and extend our best wishes as they take the liquor and tobacco concession operations forward in partnership with a new operator,” said DFS’s Brennan.
DFS’s other luxury concessions at Changi Airport, its downtown operations at T Galleria by DFS, and its Singapore Cruise Centre business will operate as usual and are unaffected by their decision to not renew this liquor and tobacco concession. Interestingly, DFS’ recent announcement of its collaboration with Changi Airport Group for a new e-commerce platform iShopChangiWines.com to offer wines, champagnes and sakes that have their duties and GST absorbed to non-travelers may have been a precursor to this current development.
It’s an end of an era for travel retail in Singapore with DFS pulling out after almost 40 years, and the new concessionaire for liquor and tobacco at Changi Airport will have big shoes to fill. Over the past years DFS has engaged travelers in a wide spectrum of airside activities, including running whiskey festivals, special pop-up events, and even showcasing Singapore’s cocktail culture.
[…] in August last year declined to participate in a tender by Changi Airport for its liquor and tobacco concessions that saw South Korea’s The Shilla Duty Free and Lotte Duty […]