People wearing face masks following the coronavirus disease (COVID-19) outbreak shop at the Sanya International Duty-Free Shopping Complex in Sanya, Hainan province, China November 25, 2020. REUTERS FILE PHOTO
As more people resume travel and plan vacations, retailers and consumer product companies including US discount chain Target and cosmetics maker Coty are benefiting from a jump in luggage sales and increased spending at airports.
Duty-free shops and makers of travel-related items like suitcases saw sales stall during COVID-19 lockdowns across the world, but travel-related business is taking off again. United Airlines last month forecast the highest quarterly revenue in its history.
Target Corp. said on Tuesday, ahead of its quarterly earnings release, that luggage sales grew by 50 percent in the first quarter of 2022.
“We are now seeing guests who might have been buying TVs last year, [but] this year they’re looking at luggage because they’re getting ready to travel for the first time,” Target’s Chief Executive Brian Cornell told reporters.
Samsonite International S.A., which makes Tumi and American Tourister bags, said last week its quarterly sales rose 75 percent from a year earlier.
Shift in spending
The corporate anecdotes dovetail with signs of a shift in US household consumption back toward services, after two years of outsized spending on big ticket goods while consumers were largely cooped up at home.
Commerce Department data for March, the latest available, showed the share of total spending devoted to recreation, accommodation and dining out climbed to a pandemic-era high of 10.33 percent—up from just over 6 percent early in the health crisis.
A higher number of travelers passing through airports is also lifting prospects for goods sold at stores there, such as perfume, designer makeup and liquor.
In the United States, checkpoint travel numbers in the last seven days were on average 36.33 percent higher than during the same period in 2021.
“People are shopping fragrances globally today more than ever before,” said Coty Inc. CEO Sue Nabi, adding that the global beauty company expects the momentum to continue.
Tobacco companies Imperial Brands and Philip Morris International said they were starting to see recovery of sales in duty-free shops at airports around the world, including in Europe and the Middle East.
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